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Choosing the right secured loan for you

If you're looking for the cheapest secured loan, read on and find out all you need to know about the secured loans market in the UK.

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Choosing the right secured loan for youChoosing the right secured loan for you

A secured loan is a loan that requires you use your property as security against the loan, so the lender is able to balance the risk of lending to you.

If you're looking for the cheapest secured loan, read on and find out all you need to know about your options around secured loans in the UK.

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What is a secured loan?

By taking out a secured loan, you are borrowing money that's secured against your assets, usually your property. Secured loans are often cheaper than other types of loan, but you do have to think carefully before taking one on. You could lose your home if you can't keep up the repayments.

The amount that can be borrowed on a secured loan differs from lender to lender and your individual circumstances. The cheapest secured loans are low APR loans, which means that the interest rate you are charged (known as the Annual Percentage Rate) is low.

By using a secured loan calculator with Uswitch you can compare the cost of different types of secured loans in the UK and work out, which is best for you.

Why choose a secured loan?

Secured loans – also known as homeowner loans – offer a way to borrow larger sums of money (usually £15,000 +) by using the collateral equity of your home as security against your repayments.

To ensure you have a good chance of finding the cheapest loans available to you in the UK, we work with a loan broker to widen the secured loan possibilities available to you.

The difference between personal loans and secured loans is that the secured loan is attached to your property, so your home is at risk if you default on your secured loan.

What are unsecured loans in the UK?

Unsecured loans are also known as personal loans. They're not attached to your property, such as your home. For this reason, they could be considered as higher risk for lenders as there is no collateral for lenders to claim if you are unable to repay them.

For this reason you will need to have a good credit rating based on your personal financial circumstances, to offer reassurance to lenders of your ability to pay the loan back.

Even though the personal loan is not attached to your property, once you take out a secure loan, you will still agree to terms and interest rates.

Secured loans comparison - how to find the best secured loans UK

Use our secured loans calculator to find a cheap secured loan. We will then refer you to a loan broker that we have vetted. Before searching for the cheap secured loans, you need to be honest about your loan requirements. For instance:

  • Will you take a secured loan from a lender you have not heard of?

  • How much can you afford to borrow and pay back?

  • What happens if you want to pay back your loan early?

Homeowner loans are aimed at those with a non-existent or bad credit rating as the risk the bank is taking is minimised.  Shopping around and comparing secured homeowner loans means you are more likely to find the best deal for you.

The amount that can be borrowed, the term available and the Annual Percentage Rate (APR) will depend on:

  • the value of your property

  • your ability to repay the loan

  • your personal circumstances

You need to think very carefully about how you manage a secured loan. If you default on the loan you risk losing your home.

How to get the best deals on the cheapest secured loan UK

Previously if you wanted to compare secured personal loans, you were often faced with a limited choice of providers to compare.

This is because certain secured loan providers only worked with loan brokers and weren't available directly to the general public.

We work directly with suppliers and trusted brokers to ensure that you can compare the widest selection of loans available.

By working only with reputable brokers and direct loan providers we aim to protect you from the pitfalls of borrowing from the wrong type of provider.

Cheap secured loans for people with bad credit

Secured or homeowner loans can offer the opportunity to borrow money for customers who have experienced money issues in the past and have damaged their credit history as a result.

A secured homeowner loan can be a good option because:

  • you are more likely to be accepted for a secured loan than a personal loan

  • the interest is likely to be more competitive than personal loans which are available to customers with adverse credit

  • the repayment term can be longer

These loans work because the provider has the security of your property to fall back on if you default on your payment.

A secured loan needs a lot of careful thought to ensure you're 100% confident you can meet the monthly payments over a number of years, and will not find yourself in a situation where you could lose your home.

Why should I choose a secured loan?

Secured loans allow you to borrow more and repay over a longer period than a personal loan – up to 25 years. They can normally be used for almost any purpose and as the lender has the benefit of security they can be offered to people who may be excluded from other loans. 

Borrowers who are self-employed, have recently changed jobs or have previous credit problems will be considered for a secured loan. They are also useful for borrowing larger sums or where the applicant requires a longer repayment period.

How can I find the best secured loan?

Finding the best secured loan for your situation can be complicated as there are many factors for the lender to take into account. Uswitch.com can do all the work for you with our secured loans comparison service.

All you need to do is tell us a few details about the secured loan you are looking for and your personal circumstances. It is free, impartial and any information you give us will remain confidential and secure.

Compare secured loans

Compare a whole range of secured or homeowner loans for borrowing between £3,000 and £80,000.