How do secured loans from direct lenders benefit UK borrowers?
How do secured loans from direct lenders benefit UK borrowers?
This is an asset-based financing option that you can utilise to get a substantial amount of funds. You are taking help from your asset to get funding for a necessity. If you fail to match up to the repayment deadline, you will lose your asset.
Since collateral is involved, the lender will have to face less risk. For this reason, the chances of getting secured loans for homeowners at better rates are high.
Table of Contents
- What is a secured loan?
- Popular ways to use secured loans
- How are secured loans different from unsecured loans?
- How much can I borrow with a secured loan in the UK?
- What are the repayment options for secured loans in the UK?
- Where to find low-interest secured loans in the UK?
- Who can apply for these loans in the UK?
- Can I get a secured loan with bad credit in the UK?
- How fast can I get secured loan approval in the UK?
- How to apply for secured loans in the UK?
- Are there alternatives to secured loans in the UK?
- Can a secured loan be used for debt consolidation purposes?
- Why choose our direct lending service?
What is a secured loan?
Secured personal loans are a financial tool for someone who can afford to pledge collateral to get external funds. Your home or car can be that asset you can use to get loans in larger amounts. Apart from this, this type of loan option is often preferred when someone like you has to borrow money at favourable terms and conditions.
What are the popular ways to use secured loans?
As you can get a substantial amount of money, major purposes can be settled with the help of these loans. You can assess if you have bigger necessities so that you can make a suitable choice.
- Extend or renovate your home without worrying about the expenditure
- Address multiple debt issues together, as you can get access to a bigger amount
- Cover a portion of the car purchase price
- Manage some unplanned or significant costs of the wedding
- Settling unexpected larger medical emergencies
How are secured loans different from unsecured loans?
With an unsecured loan, assets are not required, and your creditworthiness will matter the most. There are ways these two loans are different from each other. Find out from the table below.
| Secured loans | Unsecured loans |
|---|---|
| Loan amount obtainable in higher limits | You can get smaller amounts of loans |
| Getting affordable rates of interest is possible | Usually, they are levied at high interest rate |
| Fear of losing assets is there | No fear since no assets are involved |
| Ideal for bigger purposes like wedding expenses, etc. | Ideal for plugging small funding gaps when you do not have enough money |
| Longer terms of repayment | Shorter terms of repayments |
| Processing is lengthy because of paperwork | Processing does not take longer |
| Borrow based on your asset value | Borrow money based on your affordability |
How much can I borrow with a secured loan in the UK?
You can choose the secured loan amounts from the borrowing range provided by the lenders. Any amount ranging from £ 5000 to £ 50,000 can be obtained with this financing option. Determine your requirements to get a suitable amount that will depend on the equity and your repayment potential.
What are the repayment options for secured loans In the UK?
Here, you will have the liberty to pick secured loan repayment terms according to your convenience. Utilise the pre-approval facility to make sure that you get the best term between 3 and 25 years for loan repayment. Moreover, you can overpay to clear the loan faster without paying any additional fees for pre-payment. However, take precautions to avoid paying back loans late, as penalties will be charged.
Where to find low-interest secured loans In the UK?
No need to look elsewhere as Loanchester can arrange secured loans with low interest rates. You can further tally the rates offered here with other pre-approved deals. Such comparisons can help you find out the suitable amount and term that can get you the best rates. You can be worry-free as rates will remain fixed throughout the term of the loan payments.
Who can apply for these loans In the UK?
Review the secured loan eligibility criteria to make sure that you qualify for the loan application. These will be standard conditions based on which lenders offer any other loans.
- You should be a permanent UK resident with proof of residency
- You must earn a regular income and show valid proof of income
- Provide ownership documents to showcase that you are the owner
- You must be 18 years or above with an active bank account
- Your affordability should be noteworthy to the lender
Can I get a secured loan with bad credit in the UK?
Yes, you should not face any problem in getting secured loans with bad credit because of the asset factor. Here, the lender can recover the loan amount by selling the asset. Thus, they do not need other assurance. However, favourable credit scores can help you get suitable rates. Safeguard your assets by working on improving your affordability so that you can pay back loans on time.
How fast can I get secured loan approval In the UK?
Here, asset evaluation is an important aspect that will take you through a lot of paperwork. Thus, fast approval for secured loans should not be interpreted as same-day approval. However, the lender is aware of your urgency and will do the needful. Thus, you can rest assured that your loans will be processed speedily without any unnecessary delays.
How to apply for secured loans In the UK?
You must contact a UK direct lender for a secured loan application. No need to visit the bank branch or stand in queue for hours. The steps to get a secured loan as a homeowner need not be lengthy.
Go through this process, which is transparent and quicker, unlike the traditional approach.
- Form submission: You can fill out an online form for a loan application with just the necessary details.
- Upload document: These loans need you to submit some concrete proof, as the asset factor is involved.
- Assessment: The loan provider will take a valuation of your asset and conduct a few checks.
- Receipt of decision: Based on the findings, the lender will decide whether or not they can approve funds.
- Funds release: If loan amounts are approved, no one can stop you from getting access to funds that will be transferred online to your checking account.
Are there alternatives to secured loans in the UK?
Not always will you be convinced to opt for these loans. You might not be ready to keep your assets at risk. For this reason, you might consider looking for an alternative depending on the type of necessity you have. The choice of loans should also depend on your repayment ability.
This is because you cannot skip repayments, and if that happens, you will have to face the consequences. However, it would be better for you to consider opting for these alternatives.
If your requirements are trivial, there is no need for you to get these loans. There are ideal options in the form of short-term financing available. You can rely on them to manage small necessities that are unplanned. They do not require you to pledge collateral.
Here, these loans are known for their convenient way of repayment. You do not have to pay back loans in full and at once. Instalments are a small portion of the loan amount you are supposed to repay. As they are easy to manage, a delay in repayment will not happen.
At times, your credit scores are not perfect to get you approval from the lender. In that case, you can get a co-borrower to qualify for joint loans. Here, both of you will apply for loans for a common purpose.
Can a secured loan be used for debt consolidation purposes?
Yes, you can do that as you can obtain a larger loan amount. Using this, you can combine pending payment issues and pay off in one go. Thus, debt consolidation with a secured loan can be an effective reason to apply for these loans.
Why choose our direct lending service?
A secured loan in the UK from a direct lender will help you get personalised service. The loan offer will be curated based on the individual situation and affordability. They can provide flexible opportunities while adhering to a responsible lending approach.
John Milton is an experienced financial writer and personal loan expert with years of experience identifying the right category for people. He has been Chief Financial Expert at LoanChester in the UK and provides insights on the big deals of the lending institution. He is known for transforming the loan policies as per the unique needs of different borrowers. First, he focuses on what the borrowers require according to their favourable and adverse financial stances, and then he focuses on making a variety of personal loans affordable. John writes well-researched content on personal loans and also guides borrowers regarding their unique financial conditions. John holds a Ph.D. degree in banking and finance.
