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Secured Loans explained and how we can help!

Secured Loans are loans that are secured over the borrowers property, and like all financial commitments, the terms and conditions, and advantages and pitfalls of this type of borrowing should be carefully examined before entering into contractual obligations.

So here we take a closer look at Secured Loans, as well as the advantages and disadvantages of borrowing on a secured loan basis, and how we can help arrange a secured loan for you.

How do Secured Loans work?

Well firstly, you must be a homeowner or a mortgage payer to take out a Secured Loan (also known as Homeowner Loans). If you satisfy this condition, you must be able to 'tick the boxes' on the following three aspects.

  • You must have sufficient EQUITY in your home to accommodate your borrowing requirements. (Equity is the difference between the value of your property and the mortgage you have remaining).
  • You must have sufficient income to be able to afford the repayments.
  • Your credit status should be within the lender's underwriting tolerances.

The advantages of Secured Loans:

There are many advantages of raising finance by a Secured Loan, and these include the following:

  • Repayment Term: Secured Loans are usually available from 5 to 25 years.

  • Purpose of Use: this type of plan may be used for virtually any legal purpose.

  • Flexibility: even if you have experienced credit difficulties (such as mortgage arrears, County Court Judgements (CCJ's), credit defaults, bankruptcy, IVA etc.), your application can still be accommodated in most cases.

  • Competitive Interest Rates: because the loan is secured, the lenders are assured of recouping the borrowers' indebtedness. As a result interest rates are generally more competitive than those available with an unsecured loan.

  • Loan Amount: much larger advances than those available on an unsecured basis can usually be accommodated. Where unsecured loans are often restricted to £15,000, secured loans are available up to £100,000!

  • Protects main mortgage: if you are considering raising finance on your property, and you have narrowed your options down to a Remortgage or Secured Loan, you should be aware of two important features that may be affected if you remortgage.

    • Interest Rate: if you are currently enjoying a special promotion such as a low fixed rate you could end up losing the benefit and replacing it with a higher overall rate. The same could be true even if you were only paying the lender's standard variable rate, and switched all your borrowings to a higher rate because of a recent poor credit history!

    • Early Repayment Charges (ERC's): remember that if your mortgage contains any sort of lock-in clause, you could be penalised for paying your mortgage off early.

    So, by raising the finance you require with a Secured Loan instead of a remortgage, it may be possible for you to avoid early repayment charges, and maintain any preferential interest with your present mortgage!

  • Speed: in comparison with a remortgage transaction, arranging a Secured Loan will generally be completed more quickly.

The disadvantages of Secured Loans

The following aspects could be detrimental, and you should therefore take them into consideration when arranging a Homeowner Secured Loan:

  • Your home is at risk of Repossession: as Secured Loans are secured on your property, if you default seriously in your loan repayments, then repossession of your home could result.

  • Interest Rates: although Secured Loans are usually arranged at a competitive rate of interest when compared with unsecured loans, they are not usually as competitive as interest charged on a mortgage.

  • Affordability: may be you are trying to reduce your overall outlay, rather than having yet another loan payment, and in some cases a remortgage will provide you with a lower monthly outlay. It therefore makes sense to compare the various options open to you before deciding which way to jump!

Can you help me with a Secured Loan?

Sure can!

Actually it's part of our procedures when assessing your requirements to consider other forms of borrowing, and come up with the most suitable solution for you. We have a range of Secured Loan schemes within our portfolio of products, and these will cater for most circumstances!

A quick telephone call to one of our Advisors will put you into the picture, and you'll find our service to be friendly and helpful whatever your requirements. Advice and service always come first at Shire Direct, so please don't hesitate to contact us if you would like to explore the options that may be available to you. Our Freephone number 08000 282 281 is available until 10.00pm everyday (including Saturdays and Sundays) or enquire online any time, and we'll be only too happy to provide you with a rapid in-principle decision.

So, hopefully we've managed to explain Secured Loans for you and how they work, along with their benefits and downsides. Remember, there is a wealth of information available throughout the pages of this website, and we're only ever a freephone call away! We'd love to hear from you!

Enquire Online now, or call us today 08000 282 281 - our freephone lines are open 8am-10pm everyday! We'd love to hear from you!

Mortgages/Remortgages: The overall cost for comparison is 9.8% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.

There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances. For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.

Homeowner Loans: Rates from 8.9% APR variable, but typically 13.9% APR variable. Most customers are likely to receive a lower rate or the same rate as our typical variable rate - learn more about APR. Shire Direct also has a range of non-conforming loan plans with rates up to 19.9% APR. These plans are designed to help those who may have a more difficult credit history, including CCJ's and credit arrears, IVA and bankruptcy problems.
A broker fee of between 0% and 10% of the loan advance may be charged for arranging a secured loan.
All loans subject to status and secured on property.
The actual rate available will depend upon your circumstances. Written quotations on request.

THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Adding existing debt to your mortgage will increase the repayment term and overall cost.

Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.

Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.