7 Signs a Secured Loan Might Be Right for You
Thinking about borrowing? Check out 7 signs that a secured loan could be your best option in 2025. Find out if a secured loan is right for you.
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How to Tell if a Secured Loan is Right for You
Thinking about borrowing money? Secured loans can be a smart way to access larger amounts at lower rates - if they're the right fit for you. To help you decide, here are 7 key signs a secured loan might be your best option.
When a Secured Loan Might Make Sense
Not every type of borrowing is right for everyone. But if you’re wondering whether a secured loan could fit your situation, these signs will give you a clearer idea of when it might be worth considering. For a full picture of how they work, our secured loans guide breaks it down in more detail.
1. You want to borrow a larger amount than unsecured loans allow
Unsecured loans usually have lower borrowing limits. If you need more money for a big project or debt consolidation, a secured loan could give you access to a much higher amount.
2. You're looking for lower interest rates
Secured loans tend to offer lower interest rates compared to credit cards or unsecured personal loans because they're backed by your property.
3. You need flexible repayment terms
Secured loans often come with longer repayment periods, giving you the option to spread your repayments over several years and make monthly payments more manageable.
4. You want to consolidate multiple debts
If you have several debts, combining them into one secured loan for debt consolidation can simplify repayments and often reduce your overall interest costs.
5. You have some equity built up in your property
You need to have enough equity in your home to secure the loan. Equity is the value of your property minus what you still owe on your mortgage.
6. You're comfortable using your home as security
Your home is the security for the loan, so missing repayments could put it at risk of repossession. You should only apply if you're confident you can keep up with payments.
7. You're planning a big purchase or home improvement
Whether you're doing up the kitchen, buying a car, or paying for a wedding, a secured loan can give you the funds you need with competitive rates. To explore all your options, check our secured loans overview.
8. (Bonus sign!) You own your home or have a mortgage
Don't forget, a secured loan is only available if you own your home or have a mortgage on it. That's because your property acts as collateral, helping lenders reduce their risk.
Frequently Asked Questions: Secured Loans
Can I get a secured loan with bad credit?
Yes, many lenders will still consider you for a secured loan even if you've had credit issues in the past. Since your home is used as security, lenders see less risk. You might pay a higher interest rate than someone with excellent credit, but approval is still very possible - especially if you have steady income and enough equity in your home.
How much can I borrow with a secured loan?
UK secured loans range from around £10,000 up to £500,000 or more, but the amount you can borrow depends on factors like your property's market value, how much equity you have, and your income and outgoings. Lenders will assess how much you can comfortably afford to repay before approving your loan.
How long does it take to get approved?
The approval process for secured loans usually takes between 1 and 3 weeks. This can vary depending on the lender, how quickly you provide necessary documents, and whether your application is straightforward. Having proof of income, mortgage statements, and ID ready can speed things up.
What happens if I can't keep up with repayments?
If you miss payments, your lender will usually contact you to discuss options like payment holidays or restructuring your loan. Because the loan is secured against your home, further missed payments can eventually lead to repossession. That's why it's vital to borrow only what you can realistically afford and reach out for help as soon as you hit any trouble.
Can I repay a secured loan early?
Many lenders allow early repayment of secured loans, which can help you save money on interest over the life of the loan. Some charge early repayment charges (ERCs) or exit fees, especially if you repay within a fixed-rate period. Always check your loan agreement carefully before making extra payments.
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