Secured loan is a loan available to property owners or mortgage holders, where the lender can forcibly sell your house to get its money back if you can’t repay. A secured loan is the easiest way to acquire credit for setting up a new business or for any other project in UK.
Benefits of secured loans
The interest rates on secured loans are lower in the UK as compared to the unsecured loans. They also have higher borrowing limits with no restrictions on the purpose you may use the loan for. Plus, they are easier to obtain. Finally, secured debts are not included in bankruptcy. Your loan cannot be terminated by a creditor just because you file a bankruptcy.
How to find the best deal?
First of all, ask you existing mortgage lender. Many offer special terms for those with good mortgage repayment records. It won’t always be cheapest, but it’s a good benchmark for comparing others against.
Then, search the internet. There are a number of free secured loan price comparison websites. The easiest to use is MoneySupermarket. Just be aware it gets paid a lead fee if you then click through to a lender.
Finally, know that repaying early can be costly. Secured loans are not flexible and overpaying to clear the debt quicker usually isn’t allowed. If you come into some money and can pay off the whole loan, you should only pay interest for the loan up to that date, not the original loan period. However, there are early repayment penalties, so be careful.
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