A secured loan is often called as a homeowner loan as you are offered money against the security of home. A secured loan usually offers you low interest rate or APR as compared to unsecured loans.

According to your convenience you can either go for a lower APR by repaying the loan over a shorter period of time or payback less each month with a higher rate of interest.

For secured loans many lenders offer higher levels of credit to home owners. This loan allows you to borrow as much as hundreds of thousands of pounds. Even if you have an adverse credit history or any County Court Judgements against you there is chances of you being approved for the loan. Risking your home in case of default on your repayment is the only drawback of this type of borrowing. If possible you can come to some agreement on reducing the amount you repay each month and increase the repayment term. However, you can never guarantee the lender’s understanding and goodwill if you’re facing financial difficulties.

Loans offered against the property already mortgaged are called second charges while the loans secured against a property owned outright with no existing mortgage in place is known as first charges.

The essence of a secured loan is the quickness and pain free arrangements it provides even if you’ve an existing mortgage and have all the freedom to spend the money.

Today, you get secured home-owner loans in varying amounts and for many purposes. You can borrow anything between £3,000 and £100,000 and repay the amount in the next 3 –25 years as agreed by the lender. However, if you pay your loan before the term, you may land up facing a penalty. Therefore it always better to check each lender’s individual policy with regards to the same.

As compared to unsecured loans, a secured loan is easily available since the security on the loan provides the protection for the lender in the event of a customer’s inability to repay.

Moreover a secured loan is considered under The Consumer Credit Act 1974. It regulates the amount to be lent and covers loans up to a value of £25,000. However, loans above £25,000 are unregulated. While taking out a secured loan you’ve to sign a credit agreement which states the terms and conditions of the deal. You need to read this agreement carefully before you sign. Lenders often offer you payment protection schemes and insurance policies. These schemes cover your monthly repayments in the event of accident, sickness, unemployment and death. The schemes offered vary from lenders to lenders. So check the individual policies of the lenders.