Secured loan could be an option if you’re in a scenario where you want to borrow a large sum of money, perhaps to make home improvements or consolidating existing loans.Secured loan 

This means you’re more likely to get approved, even if you have a less-than-ideal credit score. You may also be approved to borrow a larger amount of money than with an unsecured loan. 

What is a secured loan?

A secured loan, also known as a homeowner loan or second charge mortgage, is specifically designed for homeowners. Your property is used as security and acts as a safety net for the lender.

If you’re looking to make home improvements, consolidate some debt, or fund a big purchase, a secured loan is a great option to consider. Interest rates are usually lower than an unsecured loan as there is more security for the lender.

Invest-loans Group Secured Loans range from £/€ 10,000 to £/€ 1,500,000 up to 30 years. How much you can borrow will depend on the lender’s criteria, your credit history, house value and equity in your property i.e., the portion you own outright.

Apply now and get money in cash or available into your bank account in 48 hours.

You can apply now by our online application form.

How does secured Loan work?

As with other types of loans, you’ll make set monthly repayments to pay back what you owe, plus any interest. The interest rate is calculated as a percentage of the amount you owe – it may be fixed or variable depending on the loan you’ve chosen. As long as you make the monthly repayments on time and in full, you won’t lose your home.

What happens if I default on a secured loan?

With secured loan, the property itself serves as collateral. So if you default on a secured loan, the lender has the legal right to take possession of your home. This means they can forcibly sell it to regain the money you owe them. However, you may be able to negotiate an agreement with the lender by contacting them as soon as you realise you’re struggling to meet your payments.

What can I use a secured loan for?

•     Consolidating existing debts 

•     Making home improvements 

•     Both of the above, and other large expenses

How do I get a secured loan?

1. Fill out our easy form
2. Check which loans you’re approved for
3. Complete application and receive funds

What should I consider before applying for a secured loan?

Secured loans come with considerable risk, so they’re not to be taken out lightly. Here are some of the things you should think about before applying for a secured loan:

Your financial ability

Think carefully about what you can afford to repay, and whether you really need whatever it is you’re taking out a loan for. Take a good look at your finances and think about future expenses too, such as starting a family or buying a home. You need to be confident that you can make every monthly repayment on time and in full, throughout the entire loan term, even if your financial or lifestyle situation changes.

Your loan-to-value ratio

When you apply for a secured loan, the lender will look at how much equity you have in your property. This is essentially the difference between how much your home is worth and how much you still owe on the mortgage. The information gives the lender an idea of how much money they could recover from selling your home if you can’t repay them. Typically, the more equity you have, the more you’ll be able to borrow.

Interest rates

Most secured loans have a variable rate, and you should factor in the possibility of rate rises when you’re working out what you can afford. It’s also useful to use APRC to compare secured loans – this is the interest rate plus any mandatory fees, so it can give you a better idea of the full cost of the loan. But remember that the advertised rate isn’t necessarily what you’ll get. The rate you’re offered may depend on how much you want to borrow, how long for, your credit score, and the value of your collateral.

What documents do I need for a secured loan?

When you apply for a secured loan, you’ll normally need to provide:

• your application form
• proof of homeownership
• Employment status
• proof of income and outgoings (e.g., bank statements)
• proof of address for the previous three months  

We’ll likely also discuss what you plan to use the loan for. Most importantly, we’ll need to gather some information about your home. You would only qualify for a secured loan if you’re a homeowner.

Types of secured loan

Debt consolidation loans

This enables you to consolidate your existing debts into one, so you only need to make one monthly repayment to one lender. 

Homeowner loans

A homeowner loan is tied to your property. It can be used for debt consolidation, home improvements, or both. 

Home improvement loans

The main reason people take out a home improvement loan is to do up their home – from getting a new kitchen to adding an extension. Difference between secured and unsecured loans

What’s the difference between secured and unsecured loans?

An unsecured loan (also known as personal loan) isn’t attached to your home or any other asset. Because there’s no collateral for lenders to claim if you can’t repay them, unsecured loans are typically considered higher risk for lenders.

So Unsecured loans and secured loans are both forms of borrowing that involve paying back a lump sum in monthly instalments, over a set period of time. However, there are differences you should consider: 

Secured loans

Tied to an asset: you need to be confident that you can keep up with the repayments, so your home is not put at risk.

Wide-ranging loan amounts: from €10,000 to €1,500,000 with Invest-loans Group.

Lower monthly repayments: you can spread the repayments over a longer period (up to 30 years), potentially with lower interest rates. However, a longer loan term may lead to you paying more interest overall.

Easier to get accepted: lenders may see you as lower risk if you’re using your home as security, so you could get accepted even if you have a low credit score or a thin credit history.

Unsecured loans

No asset needed: if you fall behind with your repayments, your home won’t be at risk, but your credit score will be affected. This could make it more difficult to get finance in the future.

Smaller loan amounts: ranging from €5,000 to €25,000 with Invest-loans Group.

Higher monthly repayments: you may end up paying more each month, as there’s usually less time to repay the loan (up to 5 years).

More difficult to get accepted: as there’s no security for the lender, they may place more emphasis on your credit score. So, you could find it trickier to get approved for an unsecured loan if you’ve experienced financial difficulties.

Can you get a secured loan with bad credit?

Yes, you may still be able to get a secured loan. There’s no specific credit score needed. secured loan lenders tend to place less emphasis on your credit score (compared to unsecured lenders), as your asset reduces the risk of them not getting their money back.

There are also some lenders and brokers who specialise in helping those with less-than-perfect credit scores to find finance.

What credit score do you need for a secured loan?

There’s no specific credit score required for a secured loan. With the loan secured against your home, you are more likely to be accepted despite having a lower credit score.

However, having a higher credit score does further increase your chances of being accepted and receiving better interest rates.

Do secured loans help your credit score?

A secured loan can help your credit score if you pay it on time, every time. Doing so will show lenders that you are a responsible borrower who can manage finances well.

By the same token, if you fall behind with repayments, your credit score will be impacted.

What are the advantages of secured loans?

• You may be able to take out larger amounts. It can be difficult to borrow more than €25,000 with a personal loan, but secured loans often go up to €100,000 or higher. For example, this may be useful for big home improvement projects or extensive education costs.
• You can stretch the loan out for a longer period, making your monthly payments more affordable. Personal loans usually last for a maximum of seven years, making it more difficult to afford the monthly payments on large loan.
• Secured loans are usually easier to get approved for if you have poor credit or no credit history. This is because using your property as collateral lowers risk for the lender.

What are the disadvantages of secured loans?

• It comes with significant risk – if you default on your payments, the lender can repossess your home to recover the debt. So, while it’s called a secured loan, it’s the lender rather than you who gets the security.
• Getting a secured loan so that you have more time to pay back the debt may give you lower monthly repayments, but you’re likely to pay more interest overall. This is because interest will be charged monthly – so the more months you have the loan for, the more interest payments you’ll make.
• If you want to pay off your loan faster than originally agreed, you may be hit with early repayment fees.