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Secured & Unsecured Loans

Most lenders will often be much more willing to accept an application for a secured loan because it is backed by an asset – especially if you are looking to borrow a larger amount.

There are some significant differences between secured and unsecured loans, and you should consider them carefully before making an application.

If you’re looking to borrow over £25,000 you will find that secured loans, or homeowner loans, which uses your home as security are often the cheapest option. Just make sure you carefully budget for your monthly repayments with a secured loan calculator. This is because unlike unsecured personal loans, you could be at risk of losing your home if you miss payments on a secured loan.

What is a secured loan?

Secured loans, also known as home equity or homeowner loans, are loans that are backed using the capital that has accumulated in your property. This means you can only apply for this type of loan if you own your own home.

How much can I borrow?

With a secured loan you can typically borrow anything from £5,000 to £125,000 against your home – potentially even more if you remortgage as a way to release capital. But bear in mind that how much you can borrow, the term and the rate of interest will all depend on your personal circumstances and the amount of equity you have built up in your home.

What are the pros and cons of secured loans?

What is an unsecured loan?

Unsecured loans, also known as personal loans, do not require any security and are available to anyone with a reasonable credit history. They are available from most banks and other lenders, including peer-to-peer lenders that enable you to borrow from other individuals.

How much can I borrow?

You can use a personal loan to borrow anything from £1,000 to £25,000. However, you can usually get the most competitive deals for sums between £7,500 and £15,000. As ever, the amount you can borrow and the rate you pay will depend on your personal circumstances.

What are the pros and cons of unsecured loans?


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