Fast secured loans

A secured loan lets you use the equity in your home to get better rates and loan terms, but how long does it take to be approved?

How fast can I get a secured loan?

The secured loan process is realistically slower than it is for an unsecured personal loan. It often takes anywhere from 3 to 6 weeks to be approved for a secured loan. However, you can still access personalised quotes for a secured loan within a matter of minutes, and apply there and then. Loan approval times vary between different lenders, and are likely to depend on your unique situation.

You’ll be using your house as security against the loan, which means the lender needs to verify the ownership situation and value the property. This can be extremely quick if the lender opts not to send somebody out to the property, and purely considers the house as it appears “on paper”, alongside the location, market conditions, etc. But often they’ll want to perform at least a “kerbside valuation” – i.e. sending a surveyor to actually look at the property from the outside. In some cases, especially for more expensive or unusual properties, they may want to come inside and look around. The lender’s valuation might not match up with your own valuation of the property or the amount you paid to purchase the house (it could be higher or lower).

Secured loans are also known as second-charge mortgages, and the first-charge holder (your mortgage provider) may need to sign off on any additional charges against the property, which can add a delay.

These steps are in addition to the normal personal loan application process, during which lenders need to verify your identity and check your credit history and financial situation.

So there are a few extra hoops to jump through, but it’s also in the lender’s interests to complete the process as quickly as possible. And the good news is there usually aren’t solicitors involved, so it’s still typically faster than a traditional mortgage would be (no offence, solicitors).

What’s the process?

  1. Get a selection of personalised quotes (about an hour). When looking for a secured loan, make sure you compare a number of providers and loans to find the one that best suits your needs. This can be done with a “soft” search of your credit file, which doesn’t affect your credit score.
  2. Pick the best one you’re likely to be eligible for (time varies). Confirm that a certain loan will let you borrow as much as you need, that the repayments are affordable and that it offers a the best interest rate available to you. You may also want to consider if a lender offers additional repayment options, such as the ability to pay off the loan early. Make sure you meet the lender’s specific eligibility criteria.
  3. Apply (a few hours). Depending on the lender, you can generally apply for a secured loan online or by phone. You’ll need to provide certain personal details and financial information as part of your application, and undergo a full credit search.
  4. Wait for the lender’s checks (a couple of weeks). Once you’ve applied for a secured loan, the lender will need to check your credit history and verify the ownership of your property, as well as its market value.
  5. Receive a formal offer (fairly instant once all checks are complete). When you receive a loan offer, you’re home and dry – you’ve passed the checks. Your offer will be valid for a defined period – perhaps 30 or 90 days.
  6. Accept the offer (minutes) and drawdown funds (a couple of hours/days). Once you’re approved for a loan, the lender will send the official offer and any other relevant documents you’ll need to sign. Once you’ve done so, the lender transfers the funds to you.

Next steps

We compare lenders including:
Spring
Equifinance
Together
Pepper Money
Evolution
United Trust Bank Ltd
Selina

What are the benefits and drawbacks of a secured loan?

Pros

  • Competitive rates. As a secured loan represents less risk than a normal personal loan, you’ll generally be offered a lower interest rate than an unsecured loan.
  • Larger loan amounts. Depending on your credit history and financial situation, you may find it hard to be approved for an unsecured personal loan, especially for loan amounts over £10,000. If you’re looking to borrow a large sum of money, a secured loan may be the most suitable option.
  • Longer loan terms. You can get a loan term of up to 30 years with a secured loan, which can help reduce the size of your loan repayments. Keep in mind that the longer your loan term, the more you’ll pay in interest over the life of the loan.

Cons

  • Your home’s on the line. If you default on the loan, you may lose equity in your house or even lose the house itself. Your credit score would also be damaged.
  • There are fees involved. Expect to pay a broker fee and potentially a product fee as well.

Can I get a fast secured loan with bad credit?

Yes, you’re still eligible for a secured loan if you have bad credit, and you’re much more likely to be approved than you would be with an unsecured loan. When deciding whether to approve a loan application, lenders are mainly concerned with the level of risk associated with the loan. This refers to the likelihood that the applicant can pay off the loan on time.

Someone with bad credit will be considered a higher risk than someone with good credit, as their history suggests they may have struggled with paying off debts in a responsible and timely manner. With a secured loan, the lender can take ownership of the home equity you’ve used as security in the event you fail to repay your loan. As a result, the loan is considered less of a financial risk for the lender, meaning you’re more likely to get approved.

What are the alternatives to secured loans?

If you’re looking to get quicker access to funds, you could consider the following:

  • Unsecured personal loans. If you don’t have any home equity in a property or are looking to borrow a smaller amount, you may want to consider an unsecured personal loan. You can generally be approved for an unsecured loan within a couple of days, though some lenders may even approve your application on the same day.
  • Short term loans.If you need quick access to money, a payday loan can be approved and funded in as little as 15 minutes. However, you’ll be limited in how much you can borrow, and you’ll also be charged a much higher interest rate. Short term loans are the most expensive type of loan and can often lead to financial difficulty.

Bottom line

Secured loans may provide a good option if you’re struggling to get an unsecured loan. However, they come with the added risk of losing the asset you put up as collateral. They offer competitive rates and larger loan amounts as they’re secured against an asset such as a house. However, they may have a lengthy application process due to the additional steps of verifying the asset. Short term and unsecured loans may provide a faster solution to borrowing money, although often accompanied by higher interest rates.

Frequently asked questions

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

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