Best secured loans

Secured loans can offer lower rates and better terms than regular personal loans. See how to find the best secured loan for your situation.


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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.

What is a secured loan?

A secured loan is a type of personal loan that requires you to use an asset as collateral against the cost of the loan. This asset is generally the equity you own in your house, which is why a secured loan can also be called a homeowner loan or second charge mortgage, but may also be a car, boat or another valuable asset.

If you fail to repay your loan, the lender can take ownership of your collateral to cover the loan amount. This means the lender is taking on less risk in lending you the money, and may offer you lower rates and better loan terms compared to an unsecured personal loan.

What are the best secured loans?

The best secured loan for one person may not be the best for another, but there are a number of factors that can determine what the best secured loan is for your situation. You should consider the following when comparing secured loans:

Competitive low rate. You’ll generally receive a lower rate on a secured loan than an unsecured personal loan as it represents less risk to the lender. Lenders are required to provide the APR on every loan product, which is meant to represent the average annual cost of the loan. However, this rate only needs to be offered to 51% of customers, and the actual rate you receive may be higher. When looking for the best secured loan, you should compare the APR, but also make sure the rate you’re offered is competitive.

Loan term. You may be able to get more flexible loan terms on a secured loan, including longer loan periods up to 20 or 30 years. Please note that the longer your loan term, the more you’ll pay in interest, and the higher the overall cost of the loan will be. The best secured loan would have the shortest loan term, while still having affordable repayments.

Repayment options. Some secured loans may give you the option to make additional repayments or even let you pay off the entire loan amount early without penalty. This can help you save on interest, and is worth keeping in mind when trying to find the secured loan that best suits your needs.

Best secured loan for bad credit

If you have bad credit, it’s likely you may have difficulty getting approved for an unsecured personal loan. However, you can still get approved for a secured loan if you have a bad credit rating. Depending on your situation, the best secured loan will be one with affordable repayments to help make sure you don’t damage your credit score further.

By successfully paying off your secured loan, you’ll also be able to improve your credit score and get better terms the next time you need to take out a loan or credit product.

Best secured loan for debt consolidation

If you’re struggling with multiple debts or just looking to get better terms on your current loan, debt consolidation is worth considering. By taking out a debt consolidation loan, you can pay off the remainder of your existing loans or debts using the new funds, and then continue to make one repayment on the new loan.

As you’ll generally receive a more competitive rate on a secured loan, you may also save money by using a secured loan to consolidate your debt as your interest payments will be lower compared to your existing loans. The best secured loan for debt consolidation would be one that covers all your current debt, with a rate that’s lower than your existing loan or debts.

Who offers the best secured loans?

Many popular banks and credit providers offer secured loans, including the Big Four banks: Barclays, HSBC, Lloyds and the Royal Bank of Scotland. You can compare a range of secured loans and get a quote here.

Frequently asked questions

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