Secured loans can offer the opportunity to borrow money for customers who have experienced money issues in the past and that may have damaged their credit history as a result. A secured loan can be your best deal as you are more likely to be accepted for a secured loan than a personal loan.
What is a secured loan?
With a secured loan, collateral, such as your home, is used as security for the repayments. If a second charge loan is not repaid, the lender has the legal power to take what is owed from the property on which the borrowing was secured or even repossess the home.
Secured loans are usually higher amounts, so are often used to consolidate existing debt, make a large purchase (e.g. a car) or fund a large project (e.g. home improvements). This investment in the property will hopefully increase its value when the time comes to sell.
Lenders look far more favourably on potential borrowers with a poor credit rating if they are prepared to secure the borrowing against their home. This gives lenders the security that they will definitely be repaid, either from a monthly repayment or by repossession of the house.