Compare secured loans
Borrow against your house, car, or other valuable asset with a secured loan. Use our soft elibility checker to see your borrowing options without affecting your credit score.
Why compare secured loans with usave?
Personalised secured loan rates
Get personalised, actual secured loan rates - the rates you are shown are the rates that you will actually get.
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What is a Secured Loan?
Secured loans are a form of borrowing in which you put an asset, often your home but also vehicles or other valuables like jewellery, up as collateral.
Putting up your possessions or property as collateral for a loan can potentially improve your chances of being approved, and increase the amount you can borrow. However, If you fail to make the monthly repayments on the loan, your possessions can be claimed by the lender.
Secured loans can be risky. But if you borrow responsibly and make the repayments reliably, they can be a good credit option, especially for people who have poor credit history and may struggle to obtain other types of finance.
To find the secured loan product with the best interest rates and terms, it pays to compare personalised loan offers through a comparison site like usave.co.uk.
How to Compare Secured Loans
To find the most competitive secured loan, you should try to compare as many offers from lenders as possible. Our loan comparison engine, makes this process easy. Input information about yourself, your financial circumstances, how much you’d like to borrow and for how long and for what purpose, and you’ll receive a list of personalised loan offers from a range of providers.
Soft Eligibility Check: Compare Loans Without Affecting Your Credit Score
Our comparison engine, uses a soft eligibility checker, which won’t leave a trace on your credit report. It’s free to use, confidential and secure, and you’re under no obligation to proceed once you see the loan offers.
Why use a secured loan?
Secured vs unsecured loans - unsecured loans are much safer than secured loans, as you aren't putting up any collateral, so why might you want to take on secured debt?
Putting up assets as collateral increases the risk of the loan for you but reduces it for the lender, making you more likely to be accepted. This makes them a good option for people with poor credit scores who might otherwise struggle to find credit.
You may also be able to obtain lower interest rates on secured loans than unsecured loans. Be aware that some secured loans come with variable interest rates, however, which means your interest rate will fluctuate with the wider market and your payments can change—up or down. Make sure your monthly payments are manageable and you have enough money in your budget in case they increase.
Unsecured loans are usually used to borrow large sums of money, typically more than £10,000. While you can usually only borrow £25,000 with unsecured loans, you can stretch this to £75,000 with a secured loan, when using your home as collateral. Conversely, you generally can’t borrow less than £3,000, so secured loans aren’t a good option if you’re just trying to fund a small one-off purchase or meet expenses in the event of an emergency.
How much can I borrow with an unsecured loan?
The amount you personally can borrow and at what rates will depend on the following factors:
- Your credit score and other financial circumstances, including your net monthly income
- The amount of free equity in your home: the difference between the property’s value and the amount owed on it, or
- The value of the other assets you put up
- The loan term
You can also borrow over a longer period of time than with an unsecured loan. While unsecured personal loans typically last for one to five years, secured loans usually have terms from five to 20 years. A long loan term will mean lower monthly payments. However, the total amount of interest you pay over the lifetime of the loan will be significantly higher the longer the term. Additionally, you may be stuck making monthly payments on the loan for years or even decades. Most secured loans prohibit early repayment.
Secured loans are a risky type of borrowing and should be used with caution. They’re best used to consolidate existing debt or for large home improvement projects.
Types of secured loans
Most secured loans are secured against a home, so they’re often called homeowner’s loans. But there are other types of secured borrowing available for those who don’t own property.
Homeowner loans
the most common type of secured loan, with your home as collateral. The amount you can borrow will depend on the amount of equity you have in the home.
Mortgages / Remortgages
Mortgages are a type of secured borrowing, secured against the home you’re paying off. Fail to make mortgage payments will lead to the repossession of the property by the lender. You may wish to remortgage your home for a higher amount if you need funds, especially for a home renovation, before you opt for a homeowner’s loan.
Vehicle loans
Similarly, vehicle loans are a type of secured borrowing, secured against the car you’re paying off. They’re distinct from logbook loans because the loan you’re paying off is for the purchase of the vehicle. As with a mortgage, you aren’t simply handed over funds.
Pawnbroker loans
Pawnbrokers issue short-term secured loans, placing a temporary loan on a possession the borrower surrenders. Common items used as collateral on pawnbroker loans include jewellery, electronics, tools, and musical instruments. The amount you can borrow will depend on the value of the item, which will take into account the its age, condition, and current consumer demand for it. If you don’t repay the loan plus interest during a designated time period, the pawnbroker will take ownership of the item and sell it.
Advantages of secured loans
- If you have a poor credit rating you’re more likely to be accepted for a secured loan than an unsecured loan
- Allow you to borrow a larger sum of money
- Can come with lower interest rates than unsecured loans
- Come with longer terms than unsecured loans, making monthly payments lower
- Can be used to consolidate debt
Disadvantages of secured loans
- If you fail to make the repayments you could lose the assets you put up as collateral, such as your home or vehicle
- Used to borrow large sums of money, so you usually can’t borrow less than £3,000, so you may end up borrowing more than you need
- Some secured loans will have variable interest rates, so the amount you’re expected to pay may change over the loan term—often going up
- Failing to keep on top of the payments can negatively impact your credit score
- Often come with high interest rates, so making payments can be expensive
- With long loan terms, you may be paying off this loan for many years. Long loan terms will also increase the amount of interest you pay