Short term secured loans

A short term secured loan can give you the double benefit of lower rates and smaller interest payments.

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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 short term secured loan?

A short term secured loan lets you use the equity you have in your home as security against the cost of the loan, but where you’ll pay off the loan within a couple of years.

While regular personal loans generally offer loan terms of 1 to 5 years, secured loans can have terms up to 20 or 30 years. A short-term secured loan is therefore any loan that requires you to use security, but which has a loan term of 1 to 5 years, in line with an unsecured personal loan.

Pros and cons of short term secured loans


  • Better rate. You’ll generally get a lower interest rate on a secured loan than you would with an unsecured personal loan.
  • Lower cost. The shorter your loan term, the less you’ll pay in overall interest. This means that a short term secured loan will cost less than the equivalent long term secured loan. Depending on how much you borrow, this may be a difference of hundreds or thousands of pounds.
  • You’ll be out of debt more quickly. If you continue to make your monthly repayments, you’ll be able to pay off the loan faster. This will also likely improve your credit score by demonstrating to lenders that you’re able to handle debt, which means you may receive more favourable terms if you take out another loan in the future.


  • Higher repayments. As you’ll have less time to pay off the loan amount, the size of your monthly repayments will be higher than they would on a loan with a longer term. This may make it harder for you to afford the cost of the loan.
  • Your equity is at risk. With a secured loan, the asset you use as collateral may be lost if you don’t repay the loan on time.
  • Limited availability. To qualify for a short term secured loan, you’ll need to have access to home equity (or another asset) that you’re willing to use as security. If not, you won’t be able to apply.
  • Fewer loan options. While most lenders offer unsecured personal loans, it’s generally only specialist lenders that provide secured loans. This means you’ll be limited in the loans you can apply for.

Can I get a short term secured loan with no credit check?

Before you’re approved for a secured loan, the lender will need to perform a credit check to determine the likelihood that you will repay your loan. If you’re looking for a short loan with no credit check, you may want to consider a short term payday loan.

However, it’s worth keeping in mind that payday loans are the most expensive type of loan, and can often cause financial stress if you’re unable to pay the loan off on time. You’ll also be limited in your choice of lenders and how much you can borrow with a payday loan.

Can I get approved if I have bad credit?

Yes, you can still get a secured short term loan with bad credit, though you’ll likely receive a less favourable rate and loan terms compared to someone with a good credit score.

What are my other short term loan options?

You may also want to consider an unsecured personal loan if you’re looking for a loan with shorter terms. You’ll likely receive a slightly higher rate than you would on a secured loan, but do not need to risk an asset as security against the loan.

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