Secured Loans vs Unsecured Loans

Credit cards, HP purchases, and personal loans are examples of unsecured loans. If you are unable to make the payments, your credit history may suffer, but you will not lose your house.

Secured loans are at the opposite end of the spectrum. They provide higher borrowing limits and allow loan repayments to be stretched out over considerably longer time periods. Secured loans also have a much higher approval and acceptance rate, although the borrower does need to provide security, which usually takes the form of their home or another valuable property they own.

What advantages do secured loans offer?

The borrower is backing the loan with a property asset, most banks and other lenders are willing to grant much larger sums. Secured loans start at £15,000 and can go up to £250,000 depending on the amount of equity you have on your property.

Which loan should I apply for?

If you need to borrow a lower amount and you want quick repayments, an unsecured personal loan may be more suitable; however, if you have CCJs or a less-than-ideal credit score, obtaining approval may prove challenging. If approved for an unsecured loan, the interest rates are generally higher.

A secured loan allows you additional repayment alternatives if you wish to borrow a larger sum, such as £15,000 or more, and you own your house. You can repay a secured loan over a period of up to thirty years, making it simpler to handle acceptable instalments.