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Secured Loan Calculator

Our secured loan calculator is easy to use and helps you get a quick response when enquiring on the expected amount for your secured loan monthly repayments.

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A secured loan is an alternative option to a full remortgage when the client:

  • Is tied to a current mortgage that has redemption penalties
  • Benefits from an existing low interest rate mortgage but needs to raise capital
  • Is being offered a further advance from the current lender but at too high a rate
  • Is currently on an interest only mortgage & does not want to alter this
  • Is raising capital for any legal purpose including business, tax bills, additional property etc.
  • Has restricted mortgage options due to adverse credit, income, age, equity etc
  • Has recently become self-employed, retired or has multiple income sources
  • Is raising capital on an owned buy to let property
  • Has been refused a 1st charge remortgage
  • Requires a loan for a short period of time
  • Needs a loan quickly
  • Already has a high LTV

Secured Homeowner Loans and Second Charge Mortgages

With UK borrowing restrictions now tighter than ever, many applicants experience tremendous difficulty in terms of being approved for unsecured personal credit. If you are a homeowner and you are looking to borrow a substantial amount of money, from £25,000 upwards, there are alternatives with improved repayment flexibility and much higher rates of approval, even if your credit rating has let you down in the past.

Secured homeowner loans are sometimes known as second charge mortgages and are long-term borrowing products that are secured against a property. If you own the property outright, you can typically borrow anywhere up to 80% of the open market value of your home, provided you are willing to risk your home on the off chance that you will be unable to make the repayments at some point in the future. If the property is already mortgaged, the loan will be secured on a second charge basis against any remaining equity once the outstanding mortgage amount has been subtracted from the value of your property.

Although there will always be some level of risk involved, there are a number of actions you can take to reduce the chance of this happening. First of all, always make sure that you borrow responsibly and within your means. You should never take out a secured loan that you cannot realistically afford to pay back and a responsible lender will always check to ensure you can afford to pay back what you borrow as part of the application process itself. Secondly, there are a number of payment protection plans available that can be added to your loan product as insurance against ill health, loss of employment and death.

When To Consider a Secured Loan

If you live in a mortgaged property that you own and you are looking to borrow a substantial sum of money, in the region of £25,000 to £250,000, you might be able to gain access to these funds by remortgaging or switching providers. However, you might already have an affordable mortgage product with low repayments in place, which would make this an impractical option. Additionally, some residential mortgages have hefty exit fees and early repayment charges and in these type situations many people prefer to take out a second charge mortgage or secured homeowner loan.

A homeowner loan is an affordable borrowing product that can be used for a large number of helpful reasons. Popular uses include home improvement (which can add serious additional value to your property), debt consolidation (lowering your monthly outgoings and improving your finances), and covering the cost of purchasing a new family car, paying for a holiday or financing a wedding. As long as you have sufficient equity in your property, a secured homeowner loan is one of the cheapest types of finance available and the repayment terms can be structured to fit your personal finances flawlessly. Unlike personal loans, which are only available to those with a good credit rating, homeowner loans are suitable for all manner of applicants including self-employed (with no proof of income) and even those with CCJs.

For more information about secured homeowner loans, second charge mortgages or any other type of property finance, call now and speak to one of our FCA authorised borrowing experts. With a choice of over 100 lending facilities and access to dozens of different loan products, we will find you the most competitive borrowing option with the lowest rates and costs.

Secured Loan Rates

Our online secured loan calculator makes it quick and easy to provide an overview of the available options, however, it can be tricky to know exactly which details to enter to obtain an exact result.

All lenders outline their own unique lending criteria and quote interest rates based on various factors. In most cases, credit ratings are used as a basis for interest rates and additional charges.

In accordance with your credit score, use the following guideline rates when entering information into our secured loan calculator:

  • Good Credit Score – Enter an interest rate of 3.9%
  • Average Credit Score – Enter an interest rate of 5%
  • Poor Credit Score – Enter an interest rate of 7.6%
  • Very Poor Credit Score – Enter an interest rate of 12%

Please note that these are indicative rates only and should not be interpreted as an accurate secured loan quotation. Call 0333 3225544 anytime for an obligation-free consultation and a more detailed discussion of the options available.

Additional Secured Loan Fees

Along with fixed or variable rates of interest, additional secured loan fees almost always apply. An initial administration, application or arrangement fee may be payable at the time the loan is agreed which is typically from £250 to £1,000. Additional costs to consider include valuation fees and early repayment fees.

Comparing the market in full using an independent broker is the best way to avoid as many of these additional secured loan fees as possible. Fees vary significantly from one lender to the next, underlining the importance of comparing the market in its entirety.

Variable vs Fixed Rate Loans

A fixed rate secured loan will be charged at a rate of interest that remains unchanged during an agreed term, whereas variable interest rates can increase or decrease at any time. Variable interest rates usually fluctuate in response to shifting Bank of England Base Rates, or simply at the discretion of the lender.

In both instances, it is important to consider how much you will pay over the life of the loan, not just which offer appears most competitive at first.

Frequently Asked Questions:

How much should I borrow?

To reduce costs, it is generally advisable to borrow the minimum amount of money you need. Interest rates and borrowing costs may be lower for higher-value loans, but you will still end up repaying more over the life of the loan.

How long should I borrow for?

Paying off your loan quickly will usually result in lower overall borrowing costs. Even if the APR of a short-term loan is considerably higher, repaying a loan over the short-term will almost always save you money.

How long does it take to arrange a secured loan?

It depends entirely on your situation and the type of secured loan you intend to apply for. A short-term bridging loan can be arranged and accessed in just a few working days, whereas a traditional mortgage or secured second charge loan could take several weeks to arrange.

Will I be liable for early repayment charges?

Lenders impose their own rules and restrictions where early repayment charges are concerned. If you would like the option to repay your loan early, if circumstances permit, the options are included in the terms and conditions of your agreement or could be explained by your broker.

Why should I choose a secured loan?

As security (collateral) is used to cover the value of the loan, a secured loan can be cheaper, easier to arrange and less restrictive in terms of eligibility checks than an unsecured loan.

Can I get a secured loan with bad credit?

Provided you have adequate security available to cover the value of the loan, you should still be able to qualify with bad credit, however, it is essential to compare the market with the support of an independent broker, in order to ensure you access a good deal.

What happens if I cannot repay?

If you encounter repayment difficulties, contact your broker and/or lender immediately. It may be possible to arrange an alternative repayment plan without further action being taken, otherwise, you risk losing the property/security you used to secure the loan in the first place.

For more information on any of the above or to discuss your requirements in more detail, contact a member of the team at UK Property Finance today.

 

Last Updated: Nov 27, 2020 @ 9:35 pm
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UK Property Finance is Authorised by The Financial Conduct Authority (FCA)
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