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Secured Homeowner Loans

your ultimate one-stop-shop for secured homeowner loans in UK

Representative 18.27% APRC (variable)

LoanTube is a credit broker not a lender.

Credit subject to status & affordability assessment by Lenders.

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on any debt secured against it.

Warning: Late repayment can cause you serious money problems. For more information, go to moneyhelper.org.uk

Your loan requirements

Comparing won’t affect your credit score.

LoanTube is a credit broker not a lender. You must be 18 or over and a UK resident.
Representative 18.27% APRC (variable)

Loans up to £35,000

Borrow for 3-7 years

Low-interest Homeowner Loans

What are secured loans?

Secured loans or secured personal loans require collateral security. Hence, a fundamental pre-requisite for borrowing a secured loan is an asset’s requirement – a car, a property or a piece of land. Secured loans tend to have low-interest rates because they pose a lower risk to the lender than unsecured loans. In case you default on the loan, the lender could recuperate their loss by repossessing your asset. So be extra careful with repayments. 

People who opt for secured loans are generally looking to borrow a sizeable amount of money, something an unsecured loan may not be able to fulfil. You may not be able to borrow hundreds of thousands of dollars without collateral. So a secured loan makes credit more accessible to you. Moreover, secured loans allow you to pay an upfront cash deposit which can do a huge favor to your credit score in case unsecured credit isn’t an option. 

 

What type of secured loans can I borrow?

Collateral gives an edge to the lender once you walk away with their money. Hypothecation reinstates the lender’s leverage – in the worst-case scenario, they’ll be able to repossess your asset. Here are some secured loans that you may consider:

  • Mortgage: A mortgage is a secured loan that you can use to buy a property. This property acts as collateral against the loan. Mortgages usually have a longer loan term due to the size of the loan amount. Although if you fail to repay this loan, your home may be seized and repossessed. 
  • HELOC: Home Equity Line of Credit or HELOC is a form of revolving credit, secured against your equity in the property. The lender agrees to lend you a specific lump sum based on your equity. You can use this money at your discretion. Plus, you will only have to pay interest on the money that you use. HELOC allows you to borrow a relatively hefty sum of money at low-interest rates. But you should be careful with repayments since the lender can foreclose the property if you fail to keep up.  
  • Home Equity Loan: Home equity loan is a secured credit backed by your equity in the property. This form of credit, too, allows you to borrow a considerable amount of money at low-interest rates. Since you put up your equity in the property as collateral, you must keep up with the loan’s payments. Or else, you could lose the possession of your home to the lender.  
  • Auto Loans: Auto loans to cars are what mortgages are to properties. You can finance the purchase of your new vehicle with an auto loan. Herein, the vehicle that you purchase will serve as collateral against the loan. It is best to keep up with your auto loan repayments to prevent your car from getting seized by the lender. 
  • Business Loans: Setting up a business is not a piece of cake. It’s not just about the business idea, but also the implementation and execution of this idea. Since business ventures require substantial capital, you may consider a business loan to finance your venture. You can use it to buy equipment, buy/rent an office space, build your inventory, or pay the human resource. Business loans, too, are backed by collateral. You may use your inventory, technical paraphernalia or office as collateral to secure this loan.

     

How do secured loans affect my credit score?

If used responsibly, secured loans can help your credit score blossom. Lenders always assess your creditworthiness before approving your loan application. It may be smarter to self-assess before applying. Furthermore, credit checks tend to harm your credit score, so leave healthy gaps between your applications. 

Once your repayment period begins, you’ll have to repay the loan along with interest via monthly instalments. Lenders report your entire payment history to one or more of the three major credit bureaus – ExperianTransUnion and Equifax. Where each timely repayment boosts your score, negative information such as collections, defaults, foreclosures, and CCJs can significantly bring it down. 

Repaying secured loans on time can certainly help you build credit. And using secured loans like HELOC or home equity loan for debt consolidation can help you improve your credit score by reducing your credit utilization ratio. 

Both secured and unsecured loans, if utilized sensibly can bring balance into your financial life. Loans can be the keys to affordable asset building, easing your financial burden through the convenience of small monthly repayments. All you need to do is borrow judiciously, use the funds responsibly and repay the money on time. 

 

When are secured loans an ideal option?

Secured loans can solve a multitude of purposes. Whether you want to consolidate your debt, plan a home improvement project or set up a business, a secured loan can help you solve your money woes. Here’s when resorting to a secured loan may yield better results:

  • Large loan amount: Secured loans can help you borrow a considerable amount of money, usually more than £35,000. Besides, you can avail a secured loan at lower interest rates. Since these loans are backed by collateral, they pose less risk for the lender. So, if you’re planning to renovate your home or consolidate high-interest debt, you may use a secured loan (HELOC, Home equity loan). 
  • Extended repayment period: Secured loans have a lengthier loan term. Stretching it out for a prolonged period can effectively reduce your monthly instalments, making repayment affordable. But remember that you’ll have to pay interest on each monthly instalment. So the longer you take to repay, the more you’ll end up paying towards interest. 
  • Access to credit: Offering collateral is a crucial pre-requisite for getting a secured loan. As long as you’re able to provide collateral, you may be able to apply for a secured loan even with below-average credit. People with no credit history may also apply for a secured loan. However, you may not qualify for competitive interest rates with poor credit or no credit history. 

Unleash your borrowing power with a homeowner loan

Can I get a loan secured on my house?

Yes, you can get a secured loan on your home. Some expenses can take a toll on your finances if you use your savings to cover them. Homeowner loans can help you spread the cost of such expenses into easy and affordable monthly instalments.

You can borrow a secured homeowner loan by leveraging your home or your equity in a property as collateral. Since these loans have collateral, lenders have a lower risk proposition, resulting in a lower interest rate on loans.

Homeowner loans can be a great way to borrow considerably larger money. So, when you’re looking to finance a big-ticket expense such as a home improvement project or a costly medical procedure, a secured homeowner loan may be a suitable option.

Two of the most popular loans for homeowners are – Home Equity Loans and Home Equity Lines of Credit (HELOC). Both are forms of secured finance, and thus, both have severe repayment implications.

While secured homeowner loans may be a convenient and low-cost financial solution, failing to repay these loans can pose a risk of repossession to your property. If you default on the loan, the lender may repossess and sell your assets to recuperate their loss. Thus, you must opt for a secured loan after fully understanding the consequences.

How exactly do secured homeowner loans work?

If you own your home outright or are the mortgaged owner, you can apply for a secured homeowner loan. The lender will likely require you to have good equity in the property, which means that the property’s market value should be greater than the mortgage balance.

Homeowner loans enable you to split your expenses into affordable monthly instalments and lighten your financial burden. You can leverage your equity in a property to borrow an amount from £1,000 to £35,000 and repay it within 3-7 years. When you know how much money you need and how you’re going to use it, this type of loan works best.

Lenders would generally look for the appraised value of your property, details about your outstanding mortgage balance, and your credit score, among other factors. If your application for a secured homeowner loan is approved, you will receive a lump sum in your bank account, which you can use as you see fit. If you fail to repay the loan, the lender may foreclose, repossess and sell your property to recoup their losses. Thus, it is crucial to adhere to your repayment schedule and be responsible for your credit usage.

What are different types of secured homeowner loans?

Criteria 

Home Equity Loans

HELOC

   

Basics 

Home equity loans enable you to borrow money against your equity in a property. 

Home Equity Line of Credit is a revolving credit wherein lenders set your borrowing limit based on your equity in a property.

Collateral type

Entire property or your equity in a property.

Entire property or your equity in a property.

Interest rates

Fixed – you pay interest for the entire loan amount.

Subject to lender’s criteria – you only pay interest for the amount you borrow.

Disbursal of credit

Lump-sum transferred directly into your bank account.

You can withdraw funds on demand until you reach the borrowing limit set by the lender. 

Repayment term

The Cycle begins as soon as the amount gets disbursed. 

You pay interest on the amount you borrow, followed by repayment of the principal. 

Repayment implications

A default could put your home at the risk of foreclosure and repossession. 

Missing payments could threaten your property, as the lender may sell it to recover their loss. 

How will home equity loans and HELOC affect my credit score?

Like any other form of credit, the impact of a home equity loan and HELOC would depend on how responsibly you utilise and pay off the credit. You would typically undergo a credit check as part of the lender’s due diligence, briefly lowering your credit score. 

Once you get your home equity loan, you will have to adhere to the mutually agreed repayment schedule and make timely repayments. 

If you fail to repay your home equity loan, the lender may repossess and sell your assets to recover their loss. Additionally, a default could take more than 150 points off your credit score. 

You have a high credit utilisation ratio if you use most of the available credit on your credit cards. Using your HELOC to pay off those balances will lower your utilisation and boost your credit scores. But to improve your financing standing, you must avoid spending more than 30% of your credit limit and refrain from opening any new credit lines.

Since HELOC is a secured loan, the balance on your HELOC does not count towards your credit utilisation. 

How to calculate my home equity?

Let’s say your home is worth £200,000, and your mortgage is £100,000. You’ll have £100,000 in home equity if you deduct the remaining mortgage from the home’s value.

Taking a few more factors into account, consider another example. Let’s say you’ve been paying on a 30-year mortgage for five years. Additionally, a recent appraisal estimated the market value of your house to be £250,000. Your original £200,000 loan still has £135,000 remaining on it. Most of the early payments on your mortgage go towards paying off the interest.

So, if you subtract the £135,000 in debt from the market value of £250,000, you have £115,000 in equity if the house does not have any other obligations. You can also divide home equity by the market value to determine your percentage. In this case, the home equity percentage is 46% (£115,000 ÷ £250,000 = 0.46 X 100).

Let us assume that you also took out a £40,000 home equity loan along with your mortgage. Instead of £135,000 in debt, the property now has £175,000 in debt. As a result, your home equity percentage drops to 30%, equal to £75,000.

What is the eligibility for secured homeowner loans for bad credit?

You will need to qualify for a loan even if you are borrowing money by using the equity in your home as collateral. The lending criteria vary by lender, but your credit history plays a significant role in your application.

To qualify for a home equity loan, you need a fair credit score. The lender will also consider other factors, such as:

  • Your income
  • Debt-to-income ratio
  • Available equity on your home
  • Current employment or source of earning

What to consider before borrowing a secured homeowner loan?

Getting a secured homeowner loan is a critical decision since it involves pledging your home as collateral. Ask yourself these questions to get more clarity on your borrowing decision:

  • Is this a suitable loan amount for me?

You must assess your affordability before borrowing a loan. Ensure that you borrow an amount you can afford to repay within the decided loan term. 

  • Will I be able to commit to the loan term? 

Long-term loans demand more commitment. Besides, the decision becomes even more critical when your home serves as collateral. Evaluate your finances and circumstances carefully to figure out a convenient loan term. 

  • What happens if I miss a repayment?

Missing a payment can cost you a few points off your credit score. Suppose you continue to miss payments and default on your loan. In that case, your lender may repossess and sell your property to recover their money. Therefore, you have to stay on top of your repayments and maintain a healthy credit relationship.

  • Do I need a contingency plan?

Pledging your home as collateral can put a great deal of responsibility on you. A contingency plan to tackle emergencies will help you keep up with repayments. Make an informed decision before borrowing a secured homeowner loan. 

How much can I borrow with a secured homeowner loan?

Crunching numbers was never this easy – check your affordability at the click of a button. Secure your future by making an informed financial decision.

Calculate monthly payments

What is the purpose of your loan ?
How much do you wish to borrow?
What repayment term would you like to choose ?

Representative Example

Loan Amount

£25,000

Loan Term

48 Months

Total repayment

£34,562

Monthly repayment

£720.07

Rep. APRC

18.27%

Interest Rate

11.88% p.a (variable)

*The rate you get will depend on your individual, financial circumstances. Late repayment can cause you serious money problems. For more information, go to moneyhelper.org.uk.

Apply for a Secured Homeowner Loan

1.

Tell us how much you need, for how long, and for what purpose.

2.

We find you the loan offers you qualify for from multiple lenders.

3.

Select the loan that best matches your circumstances, and Get Funded.

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FAQ'S

What credit score do I need to apply for secured homeowner loans?

Different lenders have different lending criteria. Lenders consider multiple factors when evaluating your credit score, but keeping it within the mid-600s may be a good call. To obtain competitive interest rates, you should aim for a higher score. Your credit score plays a vital role in the success of your application. Therefore, having a good credit score can undoubtedly benefit your application.

Does LoanTube charge an arrangement fee on secured homeowner loans?

LoanTube does not charge any upfront fee for your loan. Enjoy a transparent and hassle-free borrowing experience at zero upfront fee. 

How to improve my chances of getting a secured homeowner loan?

Qualify for homeowner loans with ease:

  • Get your home appraised beforehand.
  • Rectify any errors in your credit report. 
  • Maintain a low credit utilisation ratio. 
  • Keep a low debt-to-income ratio. 
  • Compare options to find the most suitable deal.
  • Don’t apply for too many loans at once or within a short duration.
For What can I use a secured homeowner loan?

Once you receive your homeowner loan, you may use it as per your requirement. The list includes:

  • Financing a home improvement project 
  • Consolidating high-interest debt
  • Funding higher education 
  • Investing in another property 
  • Raising capital for a business 
  • Covering an emergency medical expense

Taking out a home equity loan can provide you with financial relief, but you must use it responsibly. It is best to avoid using these funds for discretionary expenses and borrow just what is necessary, even if you could have borrowed more.

How much can I borrow with my equity?

Typically, a lender will allow you to borrow 60-80% of the equity you hold in your home. However, the amount you can borrow does not solely depend on the equity. Loan applications are evaluated based on some factors, including your credit score, employment status, and income. So, the available loan amount may vary on a case-by-case basis.

What is the maximum amount that I can borrow through LoanTube?

You can borrow up to £35,000 over 3-7 years with LoanTube.

Conclusion

It is imperative to run a thorough research and compare your loan offers to find the most suitable loan. 

Before you start shopping for loans, ask yourself these questions:

  • Can I afford the desired loan amount?
  • Is this the cheapest option available? 
  • Will I be able to commit to the monthly repayments?
  • Is my credit score in good shape?
  • What will be the repercussions if I default?

     

A good way to start your borrowing journey is by creating a generalized repayment budget. Incorporating your repayments into the budget will help you stay a step ahead and lower the chances of default. Keeping up with repayments for a secured loan is crucial because you may lose possession of your asset – perhaps your only home, car or source of income. Thus, the responsible use of credit will help you fulfil your goals and strengthen your credit. 

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Representative APR Example

The rate you are offered will depend on your individual circumstances.

Representative APR Example: Based on a loan of £25,000 over 48 months at an Annual Interest Rate of 11.88% (variable), you will make 48 payments of £720.07 per month. The total amount repayable will be £34,562. This includes a lender fee of £2714, which have been added to the loan. The overall cost for comparison is 18.27% APRC representative.

Warning: Late repayment can cause you serious money problems. For more information, go to moneyhelper.org.uk

Credit subject to status & affordability assessment by Lenders.

LoanTube is a credit broker and not a lender.

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on any debt secured against it.

Not all borrowers will qualify for a loan. The operator of this website does not engage in any direct consumer lending, we simply provide you a FREE loan brokering service. This means LoanTube does not charge customers a fee for using its introducer services, but it receives a commission from lenders or other brokers if a customer enters into a consumer credit agreement with them following an introduction by LoanTube.

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