Secured Loans - A Basic Definition

A secured loan is a type of loan which is secured against the equity in your home. They are only available to home owners and where there is enough equity in your home for the lender to secure the amount you are borrowing against your property. Secured loans can be used for a number of different borrowing requirements.

Whether you want to raise money to consolidate any existing debts, such as credit card balances, store cards or personal loans, or if you want to make improvements to your home, for example, building an extension. They cannot be used to raise money for business purposes, if you do wish to raise funds for a business, you must approach a commercial lender.

To assess if there is enough equity in your home to lend you the amount your require the lender will need to do a valuation of your property. A fee is usually charged in this instance. The lender will also assess whether you can afford the loan amount your require, taking into account your income and existing out goings. In any application you make the lender you apply too will require a credit search to be carried out against you to ensure that you have a good track record of making payments. In instances where you have missed payments on previous credit agreements or defaulted on any credit agreement or have had a County Court Judgment (C.C.J) registered against your name it will be unlikely that a lender will offer you the loan. However lenders criteria and products can differ dramatically, therefore it is important to shop around and ensure you are getting the right deal for your circumstances.

Where you are unsure if this type of loan is the right option for you to raise funds, you may wish to speak to a secured loan broker you can give you all the information and options so that your can assess if a secured loan is right for you.