If you borrowed £35,000 over a 14-year term at 8.95% p.a. (variable), you would make 168 monthly payments of £418.88 and pay £70,371.84 overall, which includes interest of £30,326.84, a broker fee of £3,550.00 and a lender fee of £995.00. The overall cost for comparison is 11.8% APRC representative.
What's in this guide?
- What is Paragon Bank?
- What types of loans does Paragon Bank offer?
- Key features of Paragon Bank homeowner loans
- Pros and cons of Paragon Bank secured loans
- What can I use a Paragon Bank loan for?
- Am I eligible for a Paragon Bank homeowner loan?
- How can I apply?
- Paragon Bank loans customer reviews
- Our verdict
- Frequently asked questions
What is Paragon Bank?
Paragon Bank has helped more than 1.5 million customers with their finances since it was founded in 1985. As well as offering homeowner loans, it also arranges mortgages, unsecured loans, motor finance and savings accounts. The bank is part of the Paragon Banking Group, which is one of the FTSE 250.
Is Paragon Bank safe?
Paragon Bank PLC is authorised and regulated by the Prudential Regulation Authority and regulated by the Financial Conduct Authority (FCA). It is also authorised under the Financial Services Compensation Scheme (FSCS).
What types of loans does Paragon Bank offer?
Paragon Bank offers a range of loan products, including car loans, business loans and asset finance, as well as first-charge and second-charge mortgages, also known as secured homeowner loans.
What is a second-charge mortgage?
In the same way as your original (first-charge) mortgage, a second-charge mortgage is a type of loan that’s secured against your home. It’s wise to think carefully before taking out a second-charge mortgage, as your property will be at risk if you don’t keep up repayments.
Key features of Paragon Bank homeowner loans
Pros and cons of Paragon Bank secured loans
- Competitive rates
- Flexible loan terms
- Variable or fixed interest rates
- You’ll need to use your home as security against the loan
- Initial loan fee
What can I use a Paragon Bank loan for?
You can use a Paragon Bank secured loan for any legitimate purpose, such as paying for home renovations, buying a car, going on holiday, paying for a wedding, or any other large expense or purchase.
Am I eligible for a Paragon Bank homeowner loan?
You should only apply for a Paragon Bank homeowner loan if you are certain you can meet the repayment terms. You must also meet the following criteria:
Paragon Bank states that these loans should not be used for business purposes, cosmetic surgery, settlement of outstanding tax, installation of solar panels, financial speculation or funding towards marital settlement.
How can I apply?
- Paragon Bank doesn’t sell its second-charge mortgages directly to customers. They are only available through a number of mortgage brokers, or “intermediaries”, who specialise in this market. You can contact Paragon Bank to find a suitable company to apply through.
- Once you have chosen an intermediary, they will ask about your circumstances and finances and about your requirements. They will then recommend a loan that is most suitable for your needs and circumstances. They will also be responsible for arranging your loan.
- Your intermediary should explain the terms and conditions of the loan, as well as what the various documents mean. You should always ask for an explanation if you don’t understand any part of your second-charge mortgage agreement, including the terms and conditions.
- If, after talking to your intermediary, you are still in any doubt you should seek independent legal and/or financial advice. Please be aware that your intermediary may charge you a fee for their service. Always check this before you go ahead.
Paragon Bank loans customer reviews
On customer review platform Trustpilot, Paragon Bank has 2.3 out of 5 stars and a rating of “Average”, based on more than 236 reviews. On similar platform Feefo, Paragon Bank has 4.3 out of 5 stars, based on more than 3,856 reviews (updated 11 February 2021).
Before taking out a homeowner loan, you should consider all of your options carefully. Other ways of borrowing large sums include:
- Remortgaging. Remortgaging is when you switch to a new mortgage, with the same or a new lender. In the process you can renegotiate the loan – potentially releasing equity.
- Unsecured personal loans. If you have excellent credit and would be able to afford it, most lenders offering unsecured loans will stretch to £25,000, or in some cases £30,000. Some big high-street banks will go up to £50,000 for existing customers, but again, you’ll need to get through the affordability and credit checks.
- Car finance. If you need money to buy a new vehicle, there is a wide range of car finance options you could consider.
Paragon Bank offers competitive secured loans with flexible loan terms and low rates, and could be a good option for homeowners looking to borrow against the equity they have in their home. However, you’re likely to need good credit history to be eligible, which could rule out some borrowers.
Frequently asked questions
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