How to better understand secured lending - Loansmart Finance

Over the last twenty years the market has exploded with lots of ways to secure a loan. We want you to be able to understand secured lending so you can apply for secured loans with confidence.


What is secured lending?

Secured lending is the same as loans with collateral, using your home as security to raise capital. Each secured loan lender looks at three key elements being security, the ability to repay and track record.

Secured lending can be a first mortgage or a second charge on your house. Due to it being a loan secured it attracts a better rate in most cases. Normally secured loan lenders will not lend above the available equity in your home. The more security on offer normally means an even better rate of interest. Secured lending normally having rates tiered in line with the amount of security.


How can I get a secured loan?

Secured loan lenders will normally assess all your income and outgoings to ensure you can afford the payments. If you are employed then payslips would be required and if self employed accounts would need to be supplied. The lender would assess your net monthly income and deduct all monthly outgoings. There should be sufficient remaining to meet the new secured lending payment.


What happens if I have a bad credit history?

Secured loan lenders always do credit checks and look for repayment history. If you have a perfect payment profile then the best secured loan rates are likely to be available. If you have had some bad credit then you will need to explain how this occurred. You may still be able to get a secured bad credit loan providing that the problems have been resolved.


What can I use the loan for?

Online secured loans are available to borrow money for any legal purpose. The secured loan lenders want to know what you are using the money for. You would normally detail the purpose on the application form and the lender will ask for more information if required. It is likely when looking to clear off other debt that the lender will want a full breakdown. Some secured loan lenders also pay any creditors off directly.


Need a hand?

For more information on secured lending please contact us. One of our dedicated loan advisors will be on-hand to help you.