Why you Should Look for a Guaranteed Secured Loan in the UK

There are many reasons why people look for guaranteed secured loans in the UK. Some want to consolidate their debts while others want to raise capital for home improvements or to treat themselves to such as a luxury holiday, wedding or car. Whatever the reason, secured loans provide a quick and easy way to raise capital if you are a homeowner. In this article we look at whether a guaranteed secured loan is the right choice for you.

Basically, a secured loan, also known as a further advance, is a loan that is taken out using your existing home as security. Secured loans are available up to 125 per cent of your home's value less any amount outstanding on your mortgage.

Secured loans have many advantages. Not least is that it is relatively easy to get approval for a secured loan. Because the loan is secured against your home banks are usually happy to offer secured loans as they know they can get back any money owed by selling your home.

Considering that secured loans are usually for large amounts, usually between £25,000 and £100,000, they are surprisingly quick and easy to arrange. Whereas a mortgage can take months to arrange from start to finish, you can usually complete the application process for a secured loan in a few weeks.

Perhaps the biggest advantage of secured loans is that they offer a very low interest rate compared to standard personal loans, unsecured loans.

Like mortgages, they can be repaid over a long period of time so you can keep monthly repayments at a manageable level. In fact, most secured loan lenders offer a good deal of flexibility when it comes to the term of the loan. You should try to keep the term as short as possible as this could save you a lot of money on the total amount of interest you pay.

If you are looking to borrow a smaller amount, under £25,000, a standard personal loan is another option you could consider. These are less risky as you do not have to use your home as security. However, the disadvantage is that you can expect to pay higher interest rates on these loans.Some people who want to release equity from their home opt for a remortgage. Remortgage interest rates are lower than secured loan rates but they can be quite expensive to arrange and the application process is more complex.

If you want a large loan and you do not want to go through the hassle and expense of remortgaging then a guaranteed secured loan is the ideal choice.

You can read other secured loan related articles on Money Beacon, such as 'What are the Pros and Cons of a Secured Loan', giving you further background information to help you make your decisions.