How to get the lowest rate on your secured loan in 2021

Homeowners wanting to borrow money in 2021 to fund home improvements, to add a home office or to buy a property before the stamp duty holiday ends in March could consider financing this using a remortgage or a secured loan. And, as many households look over the family budgets in January, they may also be considering if they should consolidate debts in order to reduce their monthly outgoings.

Those needing to act quickly will find a secured loan is significantly faster to complete than a remortgage. According to data from Loans Warehouse the average time from application to completion for a secured loan in October 2020 was 13 days.

However secured loans do have pros and cons and they may not be the right answer for every borrower.

A secured loan is when you use your home as security to borrow money from a lender. In general, secured loans in the UK are usually what is called a second charge mortgage. This is when a borrower already has a mortgage on their property but decides they want to borrow from another, ‘second’ lender. This may be because the borrower needs the funds quickly, for example buying a property at auction or to consolidate debts and reduce monthly outgoings. However, the risk is that if the borrower cannot make the monthly repayments then their home could be at risk.