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A secured loan is a loan that is secured on a property that you own, normally your home. So you are using your property to effectively guarantee that the lender will be repaid.
Therefore, if you default on the loan, the lender will have the right to apply to a Court to repossess your property and sell it to recover the money they are owed. The proceeds from the sale of the property then pays off any mortgages, loans or other debts that are secured against it, and when these are repaid, you receive the balance. Therefore, with a secured loan your home will be at risk.
Apart from the security aspect, secured loans have a range of significant benefits. They qualify for the lowest interest rates and you can generally borrow from £5,000 up to £75,000 or £100,000. You can also spread the repayments over a much greater timeframe than with an unsecured loan - as long as 25 years. This helps keep the monthly repayment down.
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