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UK Secured Loan

Your loan options if you have property as collateral.

With your property as a guarantee, you're more likely to be accepted for a loan, and pay a lower rate of interest- but the risk to you is of course higher. The UK secured loan market is largely still restricted to mortgage lenders and a new breed of consolidation experts, but there is some competition for your business now that you can obtain your top-up loan from a different provider than your mortgage.

Getting money from a lender is always easier if you already have property to set up as a guarantee against the loan. You will inevitably pay a lower interest rate, because your property reduces the risk to the lender of never seeing the money again. In the UK secured loan lending is also affected by some other factors. On the continent, a higher proportion of home loans are at fixed rate, an intrinsically higher risk factor to the lender. Here, we do have variable rate lending, which exposes you to the chance that interest rates will rise, but means the lender has little or no risk at all; and that means a very keen interest rate for you. Add to the mix a favourable economic climate (fingers crossed…) and the fact that we are a small island without an endless supply of unregulated building space, and you can see why property prices have been rising steadily and the UK secured loan market has been stable and predictable.

That said, there's no excuse for bad financial management, so don't think you can bet the house on just anything. Unlike personal loans in the £5,000-£25,000 bracket, only mortgage lenders (and specialist debt consolidation companies) are in the habit of lending very large amounts. So your choice of lender is reduced although your chance of acceptance is somewhat higher. Where the UK secured loan market has become a little more competitive is that you can now go to companies other than your existing mortgage provider for the additional loan; although to offset this, most lenders will offer their best deals to their existing customers.

If you want a secured loan, set your existing lender against somebody else. If you're in financial difficulties, you can also try specialist lenders like Purplequote, or Baines and Ernst- but if you're borrowing against your own home, do try every other method to get out of difficulty first.