What are Secured Loans?

By definition, a secured loan in the UK requires that you put up collateral in the form of property that you own in order to “secure” the loan. Usually this is your home in the case of a personal secured loan, although in the case of business secured loans the security may also be in the form of commercial property.

Secured loans are viewed as low risk by lenders since the value of the property will tend to go up over time. Hence, most loan companies prefer to arrange for these type of loans as opposed to unsecured ones (that don’t require collateral).

Just as with other types of loans, your credit score or rating is the basis whether your loan application will be approved or not. Other factors, such as your employment status (or in the case of business loans, the monetary health of your company) and the state of your finances are also taken into consideration by the loan company. Ultimately, all these factors will decide how much money you may borrow, as well as the interest rate that applies to your loan.

The actual terms and conditions will vary from lender to lender, however, as will the internal criteria that each loan company looks for when qualifying any application.

Types of Secured Loans

There are many types of secured loans that are made specifically for businesses or individuals. It all depends on what you need and how you intend to pay for it eventually. Learn more at the 'Types of Secured Loans' section, and find the right type of loan for your financial needs.

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