Secured Loan Rates from 6%
A secured loan in essence is a second charge mortgage. It allows you to raise a loan secured against your property without affecting the existing first charge mortgage. The loan is based on the value of the property as well as the outstanding mortgage.
Reasons you may require a secured loan:
- Home Improvements
- Raise a deposit to purchase another property
- Debt Consolidation
- Capital injection into business
- Repay a help-to-buy scheme or other government-funded schemes
Advantages
- Larger loan amount available in comparison to unsecured or personal loans
- Longer loan terms as the secured loan could run as long as your mortgage, where as personal loans are usually restricted to a 5-7 year term. This means you could have access to lower monthly payments.
- Lower interest rates in some cases compared to a personal loan as the lender will be securing against a property.
- Access your equity without having to re-mortgage which could prevent any early repayment charges being payable.
Other options to consider
It is important you explore alternative options to weigh up what works best for your circumstances. A re-mortgage is a much cheaper option in terms of interest rates and fees in comparison to a secured loan, so it is always worth checking whether you have any early repayment charges and if you do what are they. If the cost is a small amount which is the same cost as fees for the secured loan it could be worth exploring the re-mortgage.
Your first charge lender may offer a further advance which again will not affect your existing first charge. You will need to discuss this option with your mortgage lender directly.
If you are looking for a low loan amount, an unsecured loan may work out to be cheaper. With a secured loan there are upfront fees involved such as a valuation, this also means secured loans take longer to complete.
It can be overwhelming looking at all options so it is best discussed with an independent broker who will guide you through the options.