Secured Loan FAQs
- What is a secured loan?
A secured loan, often referred to as a homeowner loan, is a loan that is secured against your home.
- What can you use a secured loan for?
You can often use a secured loan for anything you like including but not limited to consolidating your debts, home improvements or school fees.
- Who can apply for a secured loan?
Anybody that is a homeowner with an outstanding mortgage. You must own enough of your property to at least cover the amount you wish to borrow.
- What if I am self-employed?
Yes, as long as you have been self-employed for more than 12 months, you will be asked to provide some proof of earnings, such as three months bank statements.
- What if I own my property outright?
Unfortunately you need to have an outstanding mortgage to be able to apply for a secured loan because they can only be given in addition to a mortgage. That said, we can still help you to arrange finance through other means such as a mortgage.
- What if I don’t live in my property?
You can still apply for a secured loan, provided you show proof of a formal tenancy agreement. You will normally need a loan to value (LTV) of less than 65 per cent.
- What is LTV?
LTV is short for Loan to Value, and is calculated as the amount you owe on your mortgage as a percentage of its market value. For example, if your home is worth £200,000 and you have £100,000 outstanding on your mortgage you have an LTV of 50%. We can usually find loan deals for people with LTVs of up to 95%.
- How much can I borrow?
This depends on your circumstances, but we typically work with loan values of between £5,000 and £200,000.
- How much will I pay back?
Again, this depends on your circumstances, the amount you borrow and the interest rate at which you borrow. Once you have decided on a loan you will arrange a monthly repayment plan with the loan provider.
- How do I apply for a secured loan?
You can apply online for a loan deal you have found through Comparealoan.co.uk.
- Will my credit rating be affected?
Not at the comparison stage. Unlike other loan brokers we run a soft credit search to find you deals that you will be accepted for without a full credit check. It is only when you decide to go ahead with a loan that a fill credit search will be performed.
- Will I pay a fee?
Not up front, but there will be an arrangement fee that is added to the cost of the loan, which will cover all broker costs including legal and valuation fees.