Secured Loans

What is a secured loan?

If a loan is secured, the lender is given legal access to something you own – for example your home or car – as security for the loan. This means that if for any reason you are unable to make loan repayments, the lender could use your home or car to reclaim the money that you owe them.

 

Why would you take out a secured loan?

There are three main reasons why you might take out a secured loan:

  • If you want to borrow a lot of money. Many lenders will only lend higher amounts of money if the loan is secured.
  • To get a lower interest rate. You may be able to get a good rate of interest on a secured loan, because the lender has the security of your home or car so the loan is less risky for them.
  • If you have a poor credit rating. Lenders are likely to be more open to lending to you in these circumstances if you go for a secured loan, as they have the security of your home or car if you are unable to make the repayments.

Are there any disadvantages of secured loans?

The main disadvantage from a borrower’s point of view is that with a secured loan there is a risk of losing your home or car if things go wrong and you can’t make your loan repayments.

You may also find that the repayment period for a secured loan is quite a long time, and there may be additional charges if you want to pay it off sooner.

What other loan options are available to me?

You may be in the position where you do not want to risk taking out a secured loan, but are worried that your current credit score may not be high enough to be accepted for other types of loan. It can be very easy for circumstances to dent your credit score, and some lenders are not flexible enough to overcome this.

Fortunately at Advantage Loans we will consider any loan application, even if you have poor credit history or even a CCJ. The most important thing to us is whether you are now able to afford the loan repayments.

Advantage Loans offer unsecured loans between £250-£2000. The loan is repayable over a period of 24 months by weekly, fortnightly or monthly instalments. We do not charge set up fees and if you want to repay your loan early there is no charge for that either. You can apply for your loan here.