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Whether it’s buying a new car, or funding some home improvements, a personal loan can give you the flexibility to stay on top of your finances.

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Loans Explained

A personal loan, sometimes known as an unsecured loan, is one made between an individual and a lender without the need of an asset to borrow against.

Typically personal loans range from £1,000 to £35,000 with a loan term of 12 to 36 months. The exact amount you can borrow will depend on the lender, your personal circumstances and your 'credit-worthiness'.

Personal loans are very versatile and can be used for many reasons, some examples include: debt consolidation, home improvements, a car purchase or even a holiday.

A secured loan requires the borrower to offer an asset (usually their property) as collateral in the loan agreement. This means that if the borrower fails to make their repayments, the lender can then repossess the asset to cover what's owed. Because of this security, lenders are usually willing to offer higher loan amounts compared with unsecured lenders. The increase risk to the borrower is obvious however a secured loan may give them access lower interest rates. Secured loans can also be a good option for people with poor or little credit history.

The Annual Percentage Rate (APR) is the annualised interest rate charged on a loan. It represents the overall cost of borrowing over a one year period and is expressed as a percentage. As well as the interest, it includes any additional fees attached to the loan, and it helps consumers understand and compare loans more easily.

To calculate how much interest you will pay on loan you can use the following formula:

Total Interest = (Principle Amount) x (APR) x (Loan Term)

Let's say you're considering taking out a loan of £10,000 for 3 years with an APR of 5%. This is how that would look:

Total Interest = £10,000 x 0.05 x 3 = £1,500
Total Repayable = £11,500

Keep in mind that this is a simplified example and the actual APR will vary based on the loan terms and your personal circumstances. When you search with LowRateLoans.co.uk we will calculate the total amount interest repayable, meaning you don't need to work this out yourself!

What is a personal loan?

A personal loan, sometimes known as an unsecured loan, is one made between an individual and a lender without the need of an asset to borrow against.

Typically personal loans range from £1,000 to £35,000 with a loan term of 12 to 36 months. The exact amount you can borrow will depend on the lender, your personal circumstances and your 'credit-worthiness'.

Personal loans are very versatile and can be used for many reasons, some examples include: debt consolidation, home improvements, a car purchase or even a holiday.

What is a secured loan?

A secured loan requires the borrower to offer an asset (usually their property) as collateral in the loan agreement. This means that if the borrower fails to make their repayments, the lender can then repossess the asset to cover what's owed. Because of this security, lenders are usually willing to offer higher loan amounts compared with unsecured lenders. The increase risk to the borrower is obvious however a secured loan may give them access lower interest rates. Secured loans can also be a good option for people with poor or little credit history.

What is a APR?

The Annual Percentage Rate (APR) is the annualised interest rate charged on a loan. It represents the overall cost of borrowing over a one year period and is expressed as a percentage. As well as the interest, it includes any additional fees attached to the loan, and it helps consumers understand and compare loans more easily.

How is APR calculated?

To calculate how much interest you will pay on loan you can use the following formula:

Total Interest = (Principle Amount) x (APR) x (Loan Term)

Let's say you're considering taking out a loan of £10,000 for 3 years with an APR of 5%. This is how that would look:

Total Interest = £10,000 x 0.05 x 3 = £1,500
Total Repayable = £11,500

Keep in mind that this is a simplified example and the actual APR will vary based on the loan terms and your personal circumstances. When you search with LowRateLoans.co.uk we will calculate the total amount interest repayable, meaning you don't need to work this out yourself!

How will you know which loan is best for you?

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Some frequently asked questions...

Can I get a loan if I have poor credit?

Yes, however a poor credit score will certainly affect what loan offers you are eligible for. For higher loan amounts you might want to consider a secured loan instead of a personal loan. You could also look at ways to improve your score before applying for a personal loan.

Does searching for a loan impact my credit score?

If you apply using a comparison service like ours then your credit score will not be impacted. Just make sure the website you use guarantees a 'soft search'.

How can I get the cheapest loan offers?

In order to obtain the cheapest rate on a loan it's best to shop around. Use comparison sites like ours to see what offers are available to you. It might also be worth checking your credit report to see if there is anything you can do to improve your credit score.

How much can I borrow?

Unsecured loans are available for amounts up to around £25,000 whereas secured loans can go up to £250,000. The amount you can borrow as an individual will depend on other factors such as your credit score, personal circumstances and the value of your house/asset.

How much interest will I pay on a loan?

The amount of interest you pay on a loan will be determined by the APR (annual percentage rate). The rate that you are offered will depend on several factors. These include the loan amount, the loan period, your creditworthiness and also whether the loan is secured or unsecured.

What can I use a personal loan for?

Personal loans are very versatile and can be used for a number of purposes. Some typical uses include debt consolidation, a one-off purchase, home improvements or a new car.

What is a soft search?

This means that your credit score won't be impacted, even when carried out multiple times. A single hard search won't affect your credit score, however multiple hard searches over a short period can affect a lender's decision to lend to that customer.

What's happens if I miss repayments?

Missing loan repayments will often incur fees and additional interest that you will owe to the lender. It's also likely to negatively impact your credit score.

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Min Read
Personal Loans
Personal Loans
Personal Loans

How interest works and what to watch out for

Rebecca Goodman
Understand how interest on personal loans works, how it affects what you repay and what to watch out for to avoid paying more than necessary.
Read More

If you’ve ever taken credit out before, be it a loan, car finance, or a credit card, you’ll have seen an interest rate applied to your repayments.

It’s the amount a lender charges you for borrowing money and you will pay the interest back in monthly repayments.

The amount of interest you are charged is important as it will impact the overall amount of money you end up paying back to a lender.

How long you pay interest for is also important, as the longer you’re making interest payments, the more you’ll pay overall usually.

Here we look at exactly how interest works when it comes to personal loans and why it matters.

What is interest?

Interest rates are set out as a percentage and they tell you how much you will pay a lender when you borrow money. They are a very important element of a loan and the rate of interest you’re given will depend on lots of factors, including your credit score.

The amount of interest you pay will be unique to you but as a very basic example:

  • If you had a loan of £1,000 and an interest rate of 5%, you would pay back £1,050 in total.
  • If you had a loan of £1,000 and an interest rate of 20%, you would pay back £1,200 in total.
  • If you had a loan of £1,000 and an interest rate of 30%, you would pay back £1,300 in total.

What is the Bank of England base rate?

When talking about interest rates you’ll often hear the Bank of England base rate mentioned. This is a central rate set by the Bank of England and a group of experts - known as the Monetary Policy Committee (MPC) meet up to decide what this rate should be. It’s the MPC’s job to decide what the base rate should be and to keep inflation at a manageable level.

The base rate is important as it sets out the amount of interest UK banks pay. They in turn use this rate to decide how much they charge to customers when they take out credit.

If the Bank of England base rate rises, this means borrowing gets more expensive but interest paid out on savings rises too. Generally, it’s a bad sign for borrowers and a good sign for savers.

Yet if the base rate falls, this makes borrowing cheaper but savers get paid less in interest.  

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How do interest rates work on loans?

Most personal loans have a fixed rate of interest, which means the interest you pay stays the same until you have cleared the loan. But you may come across variable interest too.

Fixed interest

If you have a loan with a fixed interest rate, this means the amount of interest you pay will stay the same. If you take out £1,000 over a five-year loan term, for example, with a rate of 10% interest. For the full five years the rate of interest will remain at 10%. 

Fixed-rate products can be more expensive as you’re paying for the privilege of the rate remaining the same. They can however offer a little more security as you know your loan repayments won’t change.

Variable interest

If you have a loan, or any other financial product, with a variable rate of interest, this means the amount of interest you pay may change. It could go up, or down, and this means you could end up paying a different amount back overall. 

In general, it’s usually cheaper to take out a variable-rate product because you are also taking on the risk that the interest rate may go up. Most variable-rate products are linked to something else, such as the base rate, so will go up or down if it does.

What is an APR?

The APR stands for the annual percentage rate. It tells you how much a loan will cost you over a year. The higher the APR, the more money you’ll end up paying back and the lower it is, the cheaper the borrowing will be. 

The APR includes the interest rate you will pay and the cost of any extra fees that may be applied, such as an application fee if there is one. It doesn’t include non-standard fees, such as fees for late or missed payments.

What is a representative APR?

When you apply for a new loan, or any other borrowing, you’ll be shown the representative APR. This is also known as the average APR and it applies to at least 51% of people who apply for the loan. However, it’s important to remember this isn’t the rate given to everyone and your APR will depend on things like your credit history and your income.

What is AER?

The AER is the annual equivalent rate and it’s used in savings products. It shows the amount of interest someone should earn over a year when they open a new savings product.

What is compound interest?

Compound interest is slightly more complicated than standard interest. It’s all to do with savings accounts and it means that you will earn interest on the money you first put away and you’ll also earn interest on any interest you earn. 

With compound interest, you will earn more, the more you are able to save. To explain it simply, the following table shows how compound interest works on a savings account with £1,000 in it which earns 5% interest.

Years Saving Initial balance Interest earned Closing balance
1 £1,000 £50 £1,050
2 £1,050 £52 £1,102
3 £1,102 £55 £1,157

How do lenders decide how much interest to charge?

Lenders who offer loans and other credit products, need to decide how much interest to charge when a person takes out credit. They tend to look at the following when calculating the interest rate:

  1. The borrower’s credit score: when you apply for a loan, the lender will check your credit score. It does this to see how much risk it is taking on by lending money to you. If you have a good credit score, you will usually have a cheaper interest rate. But if you have a poor credit score, you can expect to pay more in interest.
  2. The lender’s own rules: every lender will have its own set of rules when it comes to borrowers. It may only lend to people who earn a certain amount of money, for example, or those with an excellent credit score. It will use this criteria when assessing your application for credit.
  3. Market conditions: all lenders make their decisions around interest rates with the bigger picture in mind. They will keep a close eye on the Bank of England’s base rate and the wider economy when working out interest rates.

How long do interest rates last for?

Interest rates don’t always stay the same. If you have a fixed-rate product, the amount of interest charged usually remains set until you have paid off a loan and if you have a variable rate of interest the rate may change.

There are also promotional interest rates to consider. These are set interest rates which only last for a certain amount of time. For example, you might take out a credit product - such as a loan or a credit card - which has a 0% rate of interest for 12 months. After this time, the rate will change and you will start paying it.

If there is a promotional rate on a loan you’re taking out, or any other financial product, you should be told what the rate is, how long it lasts for, and what rate will apply after this time.


FAQs

What is an average interest rate for a loan?

Interest rates are set by looking at a range of different things, from the borrower’s credit score to the Bank of England base rate. If you have a good or excellent credit score, you can expect a cheaper interest rate when compared to someone with a poor credit score. 

What are the cheapest types of loan?

The cheapest interest rates are usually given to people with excellent credit scores. This is because a lender is taking on very little risk when lending money to them. A secured loan, where the loan is secured against an asset you have such as your home, is also usually cheaper than taking out an unsecured loan.

What is the interest rate in the UK today?

The Bank of England base rate is currently 4.5%, following the latest decision in March to hold rates. It is expected they will fall towards the end of 2025, which will make borrowing cheaper for consumers.  

Why are interest rates so high?

Back in 2020 when the coronavirus struck, interest rates fell to historic lows but then began to creep upwards. During the cost-of-living crisis, they were raised by the Bank of England to try and combat high inflation.

Min Read
Personal Loans
Personal Loans
Personal Loans

How to find the best personal loan

Rebecca Goodman
Taking out a personal loan can be a financial lifeline, and you can use the money to pay for just about anything - from a new car, a wedding or even home improvements.
Read More

Taking out a personal loan can be a financial lifeline, and you can use the money to pay for just about anything - from a new car, a wedding or even home improvements.

You choose how much you want to borrow and, if approved, you can have the money usually on the same day in your bank account.

Loans can be used to pay for big ticket items, like a holiday, or they can be used for short-term, emergency funding if you don’t have the cash, such as a broken fridge or a failed MOT.

But with so many loans to choose from, how do you find the best one for your needs? Here we look at everything you need to know on comparing and finding the best personal loan.

Person searching for a personal loan on a mobile device

What do look for in a personal loan

You can take out a personal loan from lots of different places; banks, building societies and specialist lenders. Most providers allow you to take out loans online, or through an app, but you can also apply in person in a bank branch.

Here are a few key things to look out for when you’re looking for a loan:

  • Monthly payment: every month you will make a repayment to your loan provider, over the term of your loan. This payment will include any interest applied to the loan and you must make these payments. If you miss a loan payment, this can negatively impact your credit score and you may be charged a fee.
  • Interest: when you take out a personal loan you will be charged interest on the money you borrow. Before you agree to take out the loan, you will be told the interest rate and exactly how much extra you’ll be required to pay on top of your loan. If the interest rate is 10%, for example, and you’ve taken out £1,000, you will end up paying back £1,100.
  • Loan term: you choose the loan term when you take out a personal loan but you can often take one out over anything from a few weeks to up to five years on average. While it may be tempting to choose a longer term, this also means you will be paying interest for a longer period, and it may cost you more overall.  

How can I use a personal loan?

You can use a personal loan for just about anything and as the money is transferred to your bank account, there are no limits on where you spend the money. However, when you apply for a personal loan you will usually be asked the reason you’re applying for the loan. Some of the most common reasons include:

  • Debt consolidation: if you are paying off several different debts, with high interest rates, you may be able to use a personal loan to clear these debts. While you are still taking on more debt, using the loan to clear the other debts means you will then just have one payment rather than several. If the interest rate is lower on the loan you will also be saving money overall, as you’re paying out less in interest.
  • Wedding: the average cost of a wedding can be around £20,000 and if you don’t have this money saved up, a personal loan could be used.
  • Holiday: depending on when you go away, a holiday could cost thousands of pounds and instead of using a credit card to pay for it, you could use a personal loan if you don’t have the money saved up.
  • Bridging loan: if you’re selling a property and buying a new one, a bridging loan can be used to fill the gap in between. It can also be used for other property-related funding such as if you’re buying a house at auction or starting a house renovation project.
  • Buying a new car: one of the most popular reasons for taking out a personal loan is to buy a new car. This is because using a loan to buy a car means you own the car outright, instead of paying for it with car finance or leasing it. The interest rates are often cheaper with a personal loan than with a car finance agreement too.
  • Home improvement: a garage extension, loft conversion or even a garden redesign can cost a lot of money which often needs to be paid out in one go. A personal loan is one way to pay for this, and can often be cheaper than other forms of credit such as credit cards.
  • Unexpected expenses: no matter how much we plan, unpredictable things can happen such as household appliances or cars breaking down. If you don’t have the cash to pay for these, a personal loan could be used.

What are the main types of personal loan?

There are several different personal loans to choose from, and the right one for you will depend on your reason for taking out a loan, how much the loan is, and things like your credit score.

The two main types are unsecured and secured loans:

Unsecured loans

These are the most common types of personal loan where the amount of money you can borrow depends on your income and your credit score.

Secured loans

To take out a secured loan you need to have something - such as a property - to use as collateral. You can often take out more money with a secured loan but there’s also a higher risk attached to these. If for any reason you can’t repay the loan, the asset you’ve used as collateral could be taken off you. In the worst-case scenario this could mean your home being repossessed.

There are also guarantor loans which require another person, usually a family member or close friend, to add their name to the loan agreement. The guarantor then agrees that they will make the loan repayments if you’re unable to.

How much can you borrow?

You can usually borrow anything from a few hundred pounds up to £15,000 or £20,000. The amount you can borrow depends on your…

  • Credit score
  • Income
  • Outgoings
  • The number of dependents you have
  • If anyone else contributes to your income

Am I eligible for a loan?

To get the best personal loan rate, with the cheapest interest, you will need to have a good credit score. These loans are reserved for those with good, or excellent, credit scores, and these people will also usually be able to borrow higher amounts.

If you don’t have a good credit score, you may still be able to take out a personal loan but the interest rate you will be charged will be higher. You may also be limited to a smaller loan amount.

Will applying for a loan affect my credit score?

When you apply for a loan, you’ll be told the amount you can borrow and also the interest rate. But as you are applying for credit this will also be marked on your credit score, even if you’re not accepted for the loan. This is the case no matter what type of credit you apply for - from a loan to a mortgage.

But there is one way to find out if you might be accepted for a loan without it making a dent on your credit score. You can use a free eligibility checker which will show you how likely it is that you will be accepted for a loan but without making a mark on your credit score.

How to boost your chances of being approved for a loan

If you don’t have a perfect credit score, there are lots of things you can do. None of these are overnight fixes but if you implement them all, your credit score will improve over time. They include:

  • Join the electoral roll: signing up to the free electoral roll means you can vote but it also helps your credit score as it is used to verify your identity. It’s free to do this on the Gov.uk website
  • Always make repayments on time: if you are late with a credit repayment, or you miss it altogether, this will leave a negative mark on your credit score. If you think you’ll forget set up a direct debit so you never miss a payment.
  • Watch your credit ratio: you’ll have a better credit score if you’re not always using all of the credit available to you. If you have a credit card with a limit of £1,000, for example, you don’t want to always have a balance of close to the £1,000 mark.
  • Check your credit score: make a note to regularly check your credit score (it’s free) with one of the leading credit reference agencies. This allows you to spot for any inaccuracies such as a wrong address or name.  

Where to find a loan

There are lots of lenders and loans to choose from, all with different rates and requirements. That’s why it’s crucial to compare different loans and not to just go with the first one you find.

Always take the time to shop around and compare loans before you apply to make sure you’re getting the best one for you.

It’s quick and easy to do this with a comparison website and always take the time to read the small print before you sign on the dotted line.

FAQs:

What is an APR?

The APR is the annual percentage rate and it’s used by lenders to calculate how much you will pay when you take out a loan. You must be told the APR before you take out a loan.

How do lenders decide who gets a loan?

Lenders look at a range of different factors when deciding who gets a loan, the amount they can take out, and what interest rate is charged. These include the person’s credit score along with factors like their income and credit score.

What happens if I’m rejected for a loan?

If you’re rejected for a loan don’t panic. There are lots of reasons why this can happen and sometimes it’s not obvious. First, look at your credit record and see if there’s anything strange there - and what your overall rate is. Then have a look at the eligibility for the loan to check you have met the requirements. You can also ask the lender for a reason, although they’re not obligated to give one. Whatever happens, don’t panic and apply for lots of other loans. This can negatively impact your credit score as it can look like you’re not managing your finances well.

Can I get a loan with a bad credit score?

Yes you can get a personal loan if you have a bad credit score but you will usually be charged a higher interest rate and will be able to borrow a smaller amount than a person with a better score.

Are there early repayment fees?

There may be early repayment fees to pay if you pay back your loan early. That’s because the lender is making less money overall from your loan in interest payments. If there are fees to pay these will be listed in the terms and conditions of the loan.

What happens if I can’t repay a loan?

If you’re struggling to repay a loan the first thing to do is speak to your lender. They need to listen to you and help you to find an affordable repayment plan. If you’re not getting anywhere or you need more help, there are a number of free and independent debt charities which can help including Step Change and Citizens Advice.

Min Read
Personal Loans
Personal Loans
Personal Loans

Debt consolidation loans: Are they really worth it?

Rachel Wait
If you have debt in multiple places, consolidating that debt into one loan can make it much easier to manage and potentially save you money too.
Read More

If you have debt in multiple places, consolidating that debt into one loan can make it much easier to manage and potentially save you money too.

But before you apply for a debt consolidation loan, it’s important to understand how they work and what to be aware of.

What is a debt consolidation loan?

A debt consolidation loan lets you combine existing debts into one place. Let’s say you’ve borrowed money on a store card, a credit card and a personal loan. This means you have three separate monthly repayments to make – which will likely all be different amounts – and potentially three different lenders to deal with.

By consolidating that debt into one new loan, you make a single monthly payment to one lender. This can make it much easier to keep track of how much you owe and if your new loan has a lower interest rate, it could work out cheaper too.

Types of debt consolidation loans

There are two main types of debt consolidation loans – secured and unsecured.

A secured debt consolidation loan is secured against an asset, often your home. Because of this security, you can typically borrow a larger sum of money over a longer term (up to 25 years or more), and interest rates tend to be lower too. You may find it easier to get accepted for a secured debt consolidation loan if you have poor credit.

However, because you’re securing the loan against an asset, that asset is at risk if you fail to keep up with your repayments. So, you need to consider this type of loan carefully. If you can’t meet your repayments, the lender has the right to take ownership of your home and sell it to recoup its money – though this is usually a last resort.

An unsecured loan, on the other hand, is lower risk as you don’t need to use an asset as security. However, this means you typically can’t borrow as much as with a secured loan and rates tend to be higher. You can usually borrow over a term of between one and seven years.

With an unsecured loan, the amount you can borrow and the interest rate you are offered usually depend on your credit history - the higher your credit score, the better your chances of securing a competitive deal.

Two people discussing loan options in front of a laptop

How does a debt consolidation loan work?

If you apply for a debt consolidation loan, your first step is to work out how much you need to borrow by calculating the total cost of your existing debts.

Once you have this figure ready, you can apply for a loan for that amount. If the lender agrees to let you borrow, you receive the loan funds and use those to pay off your existing debts. You won’t reduce the amount of borrowing you have, but you’ll now have one repayment to make each month, rather than several.

You’ll start making your new monthly repayments as soon as your new loan is in place. It’s important to make these on time, so it can be worth setting up a monthly direct debit to ensure you don’t miss any.

What debts can you consolidate using a loan?

You can consolidate a range of existing debts into one loan, such as:

·   Personal loans

·   Credit cards

·   Store cards

·   Overdrafts

·   Payday loans

What are the benefits of using a debt consolidation loan?

Some of the main benefits of using a debt consolidation loan are as follows:

·   Easier to manage: You only have one monthly repayment to make to one lender, so it’s easier to keep track.

·   Potentially cheaper: If your loan has a lower interest rate, you could save money on your debt repayments.

·   You could pay off your loan faster: Reducing your interest rate could help you pay off your debts faster.

What are the potential drawbacks?

Before deciding whether a debt consolidation loan is right for you, you should also consider the downsides:

·   You could end up paying more: If your new loan has a higher interest rate, or you choose a longer repayment term, your debt could become more expensive.

·   Fees may apply: You may need to pay an early repayment charge to pay off an existing loan early, and your new loan may come with an arrangement fee.

·   You’ll need to undergo a credit check: When you apply for a loan, you’ll need to undergo a hard credit check which will be noted on your credit file.

·   Secured loans come with risk: If you use an asset as security, it could be at risk if you fail to repay the loan.

·   You could get trapped in a debt cycle: If you continue to borrow while repaying your debt consolidation loan, you could get into financial difficulties.

How much does a debt consolidation loan cost?

The cost of your debt consolidation loan depends on several factors, including:

·   The annual percentage rate (APR): This refers to the total cost of your borrowing for a year, including interest and fees. The lower this is, the less it will cost you.

·   The term of the loan: Borrowing over a longer term lowers your monthly repayments but you end up paying more in interest.

·   Your borrowing amount: Naturally, the more you borrow, the more the loan will cost.

Should I apply for a debt consolidation loan?

Before applying for a debt consolidation loan, consider whether doing so will save you money overall.

To do this, you need to first check if any early repayment charges apply to your existing debts. You should be able to find this information in the terms and conditions of your loan or give the lender a ring to ask.

If you do need to pay early repayment charges, be aware these may outweigh any savings you’d make by consolidating your debt.

Next, add up the total cost of your current debts, including early repayment charges, to calculate how much you need to borrow. Then start comparing loans to see whether you’re likely to be able to borrow that amount.

You also need to consider how long you need to repay the amount borrowed. You may need to borrow over a longer term to make your monthly repayments more affordable. But this means you’ll pay more in interest overall, making your debt more expensive.

If you work out that consolidating your debts into one new loan will result in more manageable monthly repayments, and the total amount you’ll repay with the new loan is less than the total amount payable on your existing debts, it could be worth taking the plunge.

But if you’ll end up paying more than if you kept the debt where it is, or you don’t think you would be able to afford your new monthly repayments, a debt consolidation loan is unlikely to be a good choice. It may not be the best decision if you’re close to settling your existing debts either.

If you are struggling to keep up with your existing debt repayments, it’s important to speak to your lenders as soon as possible. They may be able to come up with a more manageable repayment plan to help you, without the need to take out a new loan.

You can also seek free advice from debt charities, such as National Debtline, StepChange and Citizens Advice.

Can I get a debt consolidation loan with bad credit?

If you have poor credit, you’ll likely find it harder to get accepted for a debt consolidation loan. But it is still possible. Just be warned that the interest rate you pay will be higher, making the loan more expensive. You might not be able to borrow as much as you’d hoped either.

If you have bad credit, you may find it easier to get accepted for a secured loan – but remember this means using an asset, such as your home or car, as security. Should you fail to repay your loan, that asset could be at risk.

For these reasons, you should think carefully about consolidating your debt if you have poor credit. Taking out a new loan could cause your credit score to dip further, and you may find that it ends up working out more expensive if you’re paying a higher interest rate.

Crucially, you need to be confident that you could comfortably afford to meet your new monthly repayments. If you can’t, you risk doing further damage to your credit rating, and you could end up making your debt situation worse.

How to compare debt consolidation loans

If you’ve decided to apply for a debt consolidation loan, we can help you compare your options from over 30 credit providers and banks.

You can select how much you need to borrow and for how long, then start your free search to receive personalised offers without affecting your credit score. We’ll only carry out a soft credit check which won’t leave a mark on your credit record and enables you to see how likely you are to be approved for a loan.

Be sure to compare factors such as the interest rate, fees, the length of the loan and the amount you can borrow to help you decide which option is right for you.

Min Read
Bad Credit
Bad Credit
Bad Credit

Bad Credit Loans: What Are Your Options?

Harry Cox
In this guide, we'll explore the various loan options available for people with poor credit histories, helping you navigate this often confusing landscape with confidence.
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If you've ever been declined for credit or found yourself facing eye-wateringly high interest rates, you're not alone. Millions of people across the UK struggle with less-than-perfect credit scores, making it challenging to access the financial products many take for granted.

The good news? Having bad credit doesn't mean your borrowing options have completely vanished. While your choices might be more limited and potentially more expensive, there are still ways of accessing credit.

In this guide, we'll explore the various loan options available for people with poor credit histories, helping you navigate this often confusing landscape with confidence.

A person checking some paperwork

Understanding What "Bad Credit" Actually Means

Before diving into your options, it's worth understanding what lenders mean by "bad credit" in the first place.

Your credit score is essentially a financial report card that tells lenders how reliable you've been with borrowing in the past. This score can be affected by various factors, including:

  • Missing or late payments on previous loans, credit cards, or bills
  • County Court Judgments (CCJs) against you
  • Previous bankruptcy or Individual Voluntary Arrangements (IVAs)
  • Multiple credit applications in a short period
  • High levels of existing debt
  • Limited credit history or being new to credit
  • Not being on the electoral register

Each credit reference agency (Experian, Equifax, and TransUnion) has its own scoring system, but generally, the lower your score, the more challenging it becomes to access affordable credit.

Your Loan Options with Bad Credit

The landscape of bad credit lending has evolved significantly in recent years, creating several potential routes for borrowers with poorer credit histories:

1. Guarantor Loans

How they work: These loans involve a second person (usually a friend or family member with good credit) who agrees to repay the debt if you can't.

Potential benefits:

  • Access to higher loan amounts (typically £1,000-£10,000)
  • More competitive interest rates than some other bad credit options
  • Opportunity to rebuild your credit score with regular repayments
  • Longer repayment terms, often 1-5 years

Watch out for:

  • You'll need to find someone willing and financially able to act as your guarantor
  • Your relationship could be strained if you struggle with repayments
  • Interest rates are still higher than standard loans
  • Your guarantor's credit score could be affected if payments are missed

Best for: Larger loan amounts when you have someone willing to back you financially.

2. Secured Loans

How they work: These loans are secured against an asset you own, typically your home or vehicle.

Potential benefits:

  • Access to larger loan amounts
  • Lower interest rates than unsecured bad credit options
  • Longer repayment terms
  • More willing lenders due to reduced risk

Watch out for:

  • You risk losing your home or other assets if you can't keep up with repayments
  • Application processes can be lengthy
  • Early repayment charges may apply

Best for: Homeowners who need larger amounts and can comfortably manage the repayments.

3. Unsecured Bad Credit Personal Loans

How they work: These are standard personal loans specifically designed for people with credit challenges.

Potential benefits:

  • No guarantor or collateral required
  • Fixed repayment terms and amounts for easier budgeting
  • Potentially quicker application processes
  • Opportunity to rebuild credit with consistent repayments

Watch out for:

  • Significantly higher interest rates (often 30%+ APR)
  • Lower borrowing limits (typically £100-£3,000)
  • Shorter repayment terms
  • More stringent affordability checks

Best for: Moderate borrowing needs when you don't have assets to secure or can't find a guarantor.

4. Credit Union Loans

How they work: Credit unions are not-for-profit financial cooperatives that often provide loans to their members at reasonable rates.

Potential benefits:

  • More understanding lending criteria focused on affordability
  • Capped interest rates (currently maximum 42.6% APR, much lower than payday loans)
  • Flexible repayment terms
  • No early repayment penalties
  • Ethical lending practices

Watch out for:

  • You'll need to become a member first (usually based on where you live or work)
  • Some require you to save with them before borrowing
  • Limited loan amounts initially
  • Not all areas have accessible credit unions

Best for: Community-minded borrowers looking for ethical, affordable options.

5. Peer-to-Peer Lending

How they work: Online platforms that connect borrowers directly with individual lenders, bypassing traditional financial institutions.

Potential benefits:

  • Alternative credit assessment methods might work in your favour
  • Often more competitive rates than high-street bad credit options
  • Quick online application processes
  • Transparent fee structures

Watch out for:

  • Still requires credit checks, though criteria may differ
  • Rates still increase significantly for poor credit profiles
  • Platform fees can add to overall costs
  • Less regulated than traditional lending

Best for: Borrowers whose bad credit comes from specific past events rather than ongoing financial difficulties.

6. Payday and Short-Term Loans

How they work: Small, short-term loans designed to cover emergency expenses until your next payday.

Potential benefits:

  • Very accessible even with seriously damaged credit
  • Extremely quick application and funding
  • Small amounts available (typically £100-£1,000)
  • No collateral required

Watch out for:

  • Extraordinarily high interest rates (though now capped at 0.8% per day)
  • Very short repayment terms
  • Risk of debt cycles if not repaid quickly
  • Potential negative impact on credit score and future borrowing

Best for: Genuine emergencies only, when all other options have been exhausted and you're certain you can repay quickly.

Rebuilding While Borrowing: Smart Strategies

If you're considering a bad credit loan, it's worth thinking beyond the immediate need to how you can improve your financial position for the future:

Use the Loan as a Credit-Building Tool

Any loan that reports to credit reference agencies gives you an opportunity to demonstrate responsible financial behaviour. Making every repayment on time and in full can gradually improve your credit score.

Consider a Credit-Builder Credit Card Instead

For smaller amounts, a credit-builder credit card might be more suitable than a loan. These cards typically have higher interest rates but lower eligibility requirements. By using them responsibly – making small purchases and paying the balance in full each month – you can improve your credit score without taking on a formal loan.

Create a Debt Reduction Plan

If existing debts are contributing to your bad credit, look at whether a debt consolidation approach might help. Combining multiple debts into one more manageable payment can sometimes improve your financial situation and credit profile over time.

Avoiding the Bad Credit Loan Traps

The bad credit loan market unfortunately includes some predatory lenders looking to profit from financial vulnerability. Here's how to protect yourself:

Research the Lender Thoroughly

Check that any lender is properly authorised by the Financial Conduct Authority (FCA) by searching the Financial Services Register. Look for reviews from other customers and check their complaint history.

Watch Out for These Red Flags

Be wary of lenders who:

  • Guarantee approval before checking your circumstances
  • Pressure you to borrow more than you initially requested
  • Charge upfront fees before providing the loan
  • Have unclear or hidden charges
  • Contact you without your permission

Calculate the Total Cost

Don't just look at the monthly payment. Calculate exactly how much the loan will cost over its entire term, including all interest and fees. This total cost of borrowing should be your primary comparison point between options. A loan repayment calculator can be great place to start.

Understand the APR

The Annual Percentage Rate includes both interest and fees, giving you a more complete picture of the loan's expense. While bad credit loans will always have higher APRs than standard loans, there can be enormous differences between providers. Comparing APRs is essential for determining the most cost-effective loan options.

When Not to Borrow

Sometimes, the best financial decision is to avoid taking on new debt, particularly if:

  • You're borrowing to cover regular living expenses
  • You're already struggling with existing debt repayments
  • You're not confident about your ability to meet repayments
  • The loan is for a non-essential purpose that could wait

In these situations, consider these alternatives:

  • Debt advice: Organisations like StepChange, National Debtline, and Citizens Advice offer free, impartial guidance.
  • Hardship funds: Check if you're eligible for grants from charities, local authorities, or utility companies.
  • Budgeting assistance: Sometimes financial challenges can be addressed through better money management rather than more credit.
  • Income maximisation: Ensure you're receiving all benefits and support you're entitled to.

Making Your Decision

If you decide a bad credit loan is right for your situation, follow these steps to find the best option:

  1. Check your credit reports with all three main agencies (Experian, Equifax, and TransUnion) to understand exactly where you stand and correct any errors.

  2. Use eligibility checkers where available – these perform "soft searches" that don't affect your credit score while giving you an indication of likely approval.

  3. Compare multiple options using comparison websites but be aware that these don't always show specialised bad credit products.

  4. Read the fine print thoroughly, paying particular attention to repayment terms, fees for late payments, and early repayment options.

  5. Only borrow what you need and can realistically afford to repay, regardless of how much you're offered.

Final Thoughts

Remember that bad credit is almost always temporary. With consistent responsible financial behaviour, most negative marks will gradually fade from your credit history. In the meantime, the right bad credit loan – approached with caution and clear understanding – can help you address immediate needs while potentially contributing to your financial recovery.

By choosing wisely, borrowing only what you need, and making every repayment on time, you can use today's financial challenges as stepping stones toward a stronger financial future.

Whether you ultimately decide to take out a bad credit loan or explore alternatives, understanding all your options is the first step toward making financial decisions you won't regret later.

Min Read
Personal Loans
Personal Loans
Personal Loans

5 things to consider before applying for a loan

Rachel Wait
Loans are a popular way to borrow cash. They can be used to help fund the cost of a large purchase, such as a new car, help you pay for a wedding, or even consolidate existing debts into one manageable monthly repayment.
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Loans are a popular way to borrow cash. They can be used to help fund the cost of a large purchase, such as a new car, help you pay for a wedding, or even consolidate existing debts into one manageable monthly repayment.

How do loans work?

When you apply for a loan, you receive a lump sum of cash that you then repay in monthly installments over a set term.

If you’re applying for an unsecured loan, where you don’t need to use an asset as collateral, terms usually range from one to seven years, and you may be able to borrow between £1,000 and £25,000. Because the interest rate is typically fixed, you’ll know exactly how much you need to budget for each month.

A secured loan, on the other hand, lets you borrow a larger sum of money over a term of 25 years or more, but you must secure your loan against an asset such as your home or car. This asset is then at risk if you fail to meet your monthly repayments. Secured loans can come with fixed or variable interest rates.

Applying for a loan is a big financial commitment, which means it’s important to consider the factors below before deciding whether a loan is the right choice for you.

 

1. What do you need the loan for?

First, think about what you need the money for - this can help you establish whether a loan is the best way to borrow the funds you need.

Generally, loans are a good option for covering one-off purchases or funding projects such as major home improvements. But if you’re looking to cover emergency expenses or need to borrow smaller sums more regularly, other borrowing options such as a credit card are likely to be more suitable.

2. How much can you afford to repay each month?

It’s crucial to have a good understanding of how much you can afford to repay each month.

To do this, go through your bank statements and work out how much money you have coming in each month from your salary and any other income, and how much you spend on household bills and other expenses. This should give you a clear idea of how much money you have left over each month and how much you could afford to put towards loan repayments.

It’s important not to overstretch yourself financially because missing loan repayments can damage your credit rating and make it harder to get credit again in the future. Increasing the term of the loan can lower your monthly repayments, potentially making them more affordable, but bear in mind this means you’ll pay more interest overall.

3. Do you have good credit?

If you haven’t checked your credit record for a while, now’s the time to do so. Having a good credit score increases the chances of getting accepted for a loan, and it also means you’re more likely to qualify for a lower interest rate.

By contrast, if you have poor credit, you might find it harder to get accepted for a loan – you’ll certainly have fewer lenders to choose from and you’re likely to pay a higher interest rate, making your borrowing more expensive. You might also be offered a smaller loan amount than you were hoping for.

You can check your credit record for free with any of the three main credit reference agencies – Experian, Equifax and TransUnion. As well as looking at your credit score, you should check your report for any errors. Even simple things like a mistake in your address can affect your chances of getting credit. So, if you spot anything, contact the credit reference agency and ask for a correction.

4. Secured or unsecured?

Another important consideration is whether you want to apply for a secured or unsecured loan.

As mentioned, a secured loan requires you to use an asset – usually your home – as security. This means the lender has the right to repossess that asset if you fail to repay your loan. This increases the risk for you, the borrower, but lowers the risk for the lender. As a result, lenders tend to offer higher loan amounts for secured loans, and you’ll usually get a better interest rate too. This makes them more suitable for larger home improvements, such as an extension.

Secured loans tend to be easier to qualify for, which means you might want to consider one if you have bad credit. But if you do apply for a secured loan, it’s crucial to make sure your repayments are affordable.

Unsecured loans, on the other hand, don’t ask for security, making them less risky for the borrower. However, as the risk is higher for the lender, you’ll need a good credit score to qualify for the best interest rates, and you won’t be able to borrow as much as with a secured loan. Unsecured loans can be a good option for buying a car, paying for a wedding and consolidating debt.

5. What’s the cost of the loan?

When comparing loans, it’s important to consider the total cost of the loan, including whether there are any arrangement fees to pay, or whether you’ll be charged an early repayment fee if you decide to pay back your loan before the end of the term.

You also want to check whether the interest rate is fixed or variable. Unsecured loans typically offer a fixed interest rate, meaning your monthly repayments remain the same for the duration of the loan, and you can budget accordingly.

Secured loans may have variable interest rates, which means the interest rate and your monthly repayments could go up or down during the loan term, making it harder to determine the overall cost of the loan.

A couple shopping for a new car

How to improve your chances of getting a loan

Before applying for a loan, it’s worth making sure your credit score is as good as it can be. You can do this by:

  • Checking you’re registered on the electoral roll – lenders use this to verify you are who you say you are
  • Paying bills and other credit repayments on time
  • Paying down any existing debts.

It’s also best to space out credit applications by at least three months, preferably six. That’s because each time you apply for credit, like a loan, a hard credit check is carried out and this leaves a mark on your credit file. If you have a lot of hard searches on your credit file in a short space of time, lenders may believe you are struggling to manage your finances and may not let you borrow.

When you compare loans through us, we initially carry out a soft credit check that leaves no mark on your credit file and won’t hurt your credit score. This allows you to see which loans you’re more likely to qualify for, helping you to apply for your chosen loan more confidently.  

What are the alternatives to a loan?

If you don’t think a loan is the best choice for you, some of the alternative options include:

  • An overdraft: If your current account offers an arranged overdraft, you could use this to cover emergency expenses or other unexpected costs. However, overdrafts should only be used for the short term, as interest rates are generally a lot higher than loan rates.
  • A credit card: Credit cards can help you spread the cost of a holiday or a one-off large purchase. You won’t be able to borrow as much as you can with a loan, but if your credit card offers a 0% purchase deal, you can avoid paying interest on your repayments for several months.
  • Savings: If you have built up a savings pot, you could use these funds to cover an unexpected bill, such as car repairs, or even to pay for a holiday. You’ll then need to take steps to replenish your savings.

Min Read
Secured Loans
Secured Loans
Secured Loans

Secured Loans: How Do They Work?

Harry Cox
In this friendly guide, we'll walk through everything you need to know about secured loans – explaining the ins and outs in plain English so you can decide if they're right for your financial situation.
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Thinking about borrowing money for that kitchen renovation you've been dreaming about? Or perhaps you're looking to consolidate some existing debts into one manageable payment? If you're a homeowner in the UK, a secured loan might be just the ticket – but it's worth understanding exactly what you're signing up for before taking the plunge.

In this  guide, we'll walk through everything you need to know about secured loans – explaining the ins and outs so you can decide if they're right for your financial situation.

What Exactly Is a Secured Loan?

Let's start with the basics. A secured loan is simply borrowing that's tied to something valuable you own - typically your home. It's a bit like having a financial safety net for the lender. If (and that's a big if!) you couldn't repay the loan, they'd have the legal right to recover their money by claiming the asset you've put up as security.

Think of it as the difference between borrowing a fiver from a friend versus borrowing £50. For the small amount, a simple promise to pay back might be enough. But for the larger sum, your friend might feel more comfortable if you leave your prized vinyl collection with them until you repay!

This security arrangement is what sets secured loans apart from unsecured options like personal loans or credit cards, where lenders have no specific asset to claim if things go pear-shaped.

Why Choose a Secured Loan?

Secured loans come with several characteristics that might make them perfect for your needs:

1. You can borrow more substantial amounts: Because you're offering security, lenders are generally happy to lend larger sums – often between £10,000 and £250,000 or even more, depending on how much equity you have in your home.

2. You'll get more breathing room to repay: Secured loans typically come with longer repayment periods, sometimes up to 25 years or beyond. This means your monthly payments could be more manageable, though you'll be paying interest for longer.

3. Interest rates tend to be friendlier: The security you're offering usually translates to cheaper loan rates compared to unsecured borrowing – potentially saving you a pretty penny over the life of the loan.

4. Your home equity matters: The amount you can borrow largely depends on the equity in your property – that's the difference between your home's current value and what you still owe on your mortgage.

5. Credit history isn't everything: While lenders will still check your credit score, secured loans can be more accessible if your credit history isn't spotless, thanks to the reduced risk for the lender.

A family enjoying time at home

Applying for a Secured Loan: What happens next?

Understanding the journey from application to receiving your funds can help you feel more confident about the process:

The Application Journey

  1. Having a chat about your finances: You'll share details about your income, outgoings, assets, and the property you're offering as security.

  2. Getting your property valued: If you're using your home as collateral, the lender will usually arrange a valuation to confirm what it's worth in today's market.

  3. Checking you can comfortably afford it: Lenders will look at your income and expenses to make sure the repayments won't stretch your budget too thin.

  4. Receiving your offer: If it's thumbs up, the lender will let you know how much they can offer, at what interest rate, over what period, and any fees involved.

  5. Sorting the legal bits: Secured loans involve some legal paperwork that formally connects the loan to your property. This might need a solicitor's help, though many lenders cover these costs.

  6. Money in the bank: Once everything's signed, sealed and delivered, the funds will land in your account – ready for that new kitchen or whatever you're planning!

How Repayments Work

Most secured loans in the UK work on a monthly repayment schedule. Each payment is a mixture of:

  • Paying back the original amount: Chipping away at what you borrowed
  • Interest: The cost of borrowing, calculated on what's left to pay

It's worth knowing that in the early years, a bigger chunk of your payment goes toward interest. As time goes on, more of each payment reduces your actual loan balance.

Different Types of Secured Loans in the UK

There are several types of secured lending to suit different situations:

Second Charge Mortgages

These are additional loans secured against your property when you already have a mortgage. It's like having a second mortgage sitting alongside your first one.

Why might you choose this?

  • You've got a fantastic interest rate on your current mortgage that you don't want to lose by remortgaging
  • You want to use the money for home improvements that could increase your property's value
  • You're looking to consolidate other debts into one more manageable payment

Homeowner Loans

This is a general term covering most property-secured loans available to homeowners. They work similarly to second charge mortgages but might come with different terms depending on the lender.

Bridging Loans

These are short-term secured loans designed to help you over temporary financial hurdles – especially useful in property transactions.

What makes them different?

  • They typically come with higher interest rates but give you quick access to funds
  • You'd usually repay them within 12 months
  • They're perfect when timing is crucial – like when you've found your dream home but haven't sold your current one yet

Debt Consolidation Secured Loans

These are specifically designed for combining multiple debts into one, potentially lower-interest secured loan.

The appeal here?

  • One simple monthly payment instead of juggling multiple debts
  • Potentially lower overall interest costs
  • More manageable repayments spread over a longer period (though this means paying more interest over time)

Why a Secured Loan Could Make Sense

For many UK homeowners, secured loans offer some compelling advantages:

Access to a Bigger Pot of Money

The security arrangement means you can potentially borrow much more than with unsecured options. This makes secured loans brilliant for major expenses like transforming your dated kitchen into a cooking paradise or adding that extension you've been dreaming about.

More Wallet-Friendly Interest Rates

The reduced risk for lenders typically means lower interest rates compared to credit cards or personal loans. Over the lifetime of a substantial loan, this difference can save you thousands of pounds.

Longer to Pay, Smaller Monthly Chunks

The extended repayment periods available with secured loans mean your monthly outgoings can be more manageable, helping you maintain a healthy cash flow.

A Lifeline When Other Doors Are Closed

If you've had some financial hiccups in the past that have dented your credit score, secured loans might still be available when unsecured products remain out of reach.

Freedom to Use the Funds Your Way

Unlike specific financing options (such as car loans), secured loans typically give you the freedom to use the money for almost anything legitimate – whether that's renovating your home, consolidating debts, or helping your child with university fees.

Risks of Secured Loans to Consider

While secured loans have their sunny side, it's important to be aware of the clouds too:

Your Home Is on the Line

The most serious consideration is that your property is at risk if you can't keep up with repayments. This makes it absolutely essential to be realistic about your ability to meet those monthly payments throughout the entire loan term – even if your circumstances change.

The Long Haul of Debt

While longer terms make monthly payments smaller, they extend how long you're in debt and usually increase the total interest you'll pay over time. It's a bit like buying something on sale but then paying for shipping that cancels out the discount!

Early Exit Penalties

Many secured loans come with charges if you want to repay them early, especially in the first few years. These fees can be substantial, potentially undermining the savings from settling early.

Impact on Future Borrowing Plans

Secured loans affect your overall debt-to-income ratio, which might limit your ability to get additional credit until you've paid down a significant portion of your loan.

Setting-Up Costs

The legal requirements and property valuations for secured loans often mean higher initial costs compared to simpler unsecured alternatives.

Who Might Find Secured Loans Most Useful?

Secured loans could be particularly well-suited for:

1. Homeowners with a good chunk of equity who need to borrow more than personal loans typically offer.

2. Borrowers hunting for lower interest rates for significant expenses, where the savings compared to unsecured options outweigh the added complexity.

3. People whose credit history has seen better days and who face limited or expensive unsecured borrowing options.

4. Those who need smaller monthly payments to make borrowing affordable, even if it means paying more interest over time.

5. Homeowners planning property improvements that could potentially increase their home's value.

Other Options Worth Exploring

Before committing to a secured loan, it's worth checking out these alternatives:

Remortgaging: Replacing your current mortgage with a new, larger one might be more cost-effective in some situations, especially if you're due to remortgage anyway.

Personal loans: For smaller amounts (typically under £25,000), unsecured personal loans keep your property out of the equation, although interest rates are generally higher.

Credit cards: For short-term borrowing or smaller amounts, 0% interest offers can be brilliant if you're confident you can repay within the promotional period.

Family loans: If possible, borrowing from family members can avoid formal loan costs and interest – though it's still smart to put things in writing to avoid any misunderstandings.

Making a Decision You Won't Regret

If you're thinking a secured loan might be right for you, here are some friendly steps to follow:

1. Be crystal clear about your needs: Work out exactly how much you need and why. Resist the temptation to borrow more just because it's available.

2. Do the sums: Use loan calculators to work out what your monthly payments would be and make sure they fit comfortably within your budget – not just now but for the entire loan term.

3. Shop around: Interest rates and terms can vary dramatically between lenders. Compare several offers, looking beyond the headline rate to consider any additional fees.

4. Read all the details: Pay special attention to early repayment charges, what happens if interest rates change, and anything that might affect your flexibility in the future.

5. Get some independent advice: For larger loans or more complex situations, consider chatting with an independent financial advisor or mortgage broker who can give you personalised guidance.

6. Think about "what if?": How would your ability to repay be affected by potential life changes like job changes, retirement, or family circumstances? It's always wise to build in some wiggle room.

Your Rights and Protections

It's reassuring to know that UK borrowers have some regulatory safeguards:

  • The Financial Conduct Authority (FCA) oversees most secured lending, ensuring certain standards of conduct and transparency
  • The Mortgage Credit Directive provides additional protections for property-secured loans
  • If things go wrong, you can take complaints to the Financial Ombudsman Service if you can't resolve issues directly with the lender

These protections ensure minimum standards of disclosure, fair treatment, and recourse if problems arise – though they don't eliminate the fundamental risks of secured borrowing.

Final Word

Secured loans can be a fantastic financial tool for UK homeowners, opening doors to substantial funds at competitive rates. The ability to borrow larger amounts over longer periods makes them perfect for those big-ticket expenses that might otherwise remain just a dream.

However, this flexibility comes with serious responsibility. The risk to your property means secured loans shouldn't be entered into lightly or without thoroughly exploring alternatives and considering how your circumstances might change in the future.

By understanding how these loans work, carefully assessing what you need and what you can afford to repay, and comparing different options, you can decide whether this type of borrowing suits your situation – and if so, secure the best possible deal.

Remember that while secured loans can help with immediate financial needs, they're a long-term commitment that will be part of your financial picture for years to come. Approach them with proper care and knowledge, and they can be a helpful stepping stone rather than a financial stumbling block.

Got more questions about secured loans? It's always worth speaking to an independent financial advisor who can give you personalised advice based on your unique circumstances.