Frequently Asked Questions..

What is a secured loan?

A secured loan (also known as a homeowner loan) is a loan secured against your property. Secured loans may be ideal if you want to borrow a large amount of money. They are usually used to consolidate existing credit, or to make home improvements, or fund major purchases. Because your property is provided as security for the loan, lenders see you as less of a risk and may charge lower rates of interest. However, your home could be at risk if you are unable to repay the loan.

Do I qualify for a secured loan?

If you’re a homeowner with a mortgage, then you will be able to apply for a secured loan.

Can I pay my loan off early?

Yes you can – most lenders will apply an ‘early repayment charge’ for settling early and this varies according to the term of the loan, the type of rate e.g. fixed or variable. Some lenders may also charge an ‘administration’ or ‘discharge’ fee when the loan is settled. This information is contained in the documents we will provide you during the process so you can check it there

How long does it take?

Each customer’s requirements are different and so the time taken will also be different. We aim to complete your loan 2 -3 weeks after you’ve told us you want to go ahead. You will be given a dedicated Case Manager who will be with you every step of the way and you’ll be able to track the progress of your loan 24/7.

What can I use my loan for?

A secured loan can be used for almost any purpose.

What can a secured loan help towards?

A secured loan can be that little extra helping hand you need if the option of remortgaging your home or taking out an unsecured or personal loan is not something you either want to do or is unavailable to you. Taking out a secured loan gives you a lump sum of money which many people can use towards home improvements such as a loft conversion and also towards helping with debt consolidation.

How long can I take a secured loan over?

Because the loan is secured on your property, the lenders will allow you take it over a much longer period of time than an unsecured, personal loan which would normally be restricted to 5 years. Secured loans can be taken for periods of time between 5 and 30 years. Don’t forget that the longer you take a loan over, the lower your repayment will be, but the more you will end up paying back.

What to consider when taking out a secured loan?

Although taking out a secured loan may seem like the easier option with lower interest rates to gain a large sum of money, it is important to consider the risks as well as the benefits.

The main reason why lenders are more likely to provide secured loans is the fact that the individual must be a homeowner. This is because the money borrowed is secured against an asset that you own, usually your home. This ultimately acts as security for the lender for any potential missed payments.

If you take out a secured loan and cannot keep up with your repayments, your home may be repossessed. Although home repossession is a worst case scenario, it is imperative that you discuss and analyse all finances before taking out a secured loan in order to make sure you are able to make all payments on time and in full.

What is an APRC?

APRC stands for Annual Percentage Rate of Charge and is used within financial services to help customers compare the total cost of borrowing between products they may be considering. The APRC given on a loan will include the whole cost of the borrowing, including any charges, upfront fees etc. The calculation of an APRC is complicated though the important thing to remember is you need to compare one loan carefully against another – for example the same term and loan amount as these will change the APRC significantly. Another important factor is your actual repayments and clearly they can be compared with other offers of finance, subject to weighing up other factors like default charges or the way interest is calculated. We are here to help of course so please ask us if you are unsure about how any of these figures affect your loan.

Do you leave a “footprint” on my credit file?

The “soft search” that is carried out as part of your initial application out has no adverse effect on your credit file. You will see the search on your own credit file but lenders will not see it. If you decide to go ahead and take out a loan, then we will be required by the lender to make a search visible to other lenders.

What is a CCJ?

A CCJ (County Court Judgement) is issued by a County Court to a person who fails to pay an outstanding debt. An unsettled CCJ will affect an individual’s credit rating and may result them being refused credit. CCJ details remain on a person’s credit file for six years. If the debt is fully settled within 30 days of the date of the judgement, it will not be listed on the credit register.

What is Loan to Value?

Usually associated with mortgages and expressed as a percentage, this is the loan amount in relation to the value of the property it is secured against. For example, someone wanting a £90,000 mortgage to purchase a £100,000 house would be borrowing 90% LTV.

What is a variable rate?

A variable rate is an interest rate that can fluctuate in the future and may be is generally cheaper than a fixed rate. Lenders sometimes link their variable rates to other rates such as the Bank of England Base Rate or LIBOR. Movements in these rates would affect the rate charged on your loan. If a lender doesn’t link their rate to anything, then they don’t have to increase your rate if base rates go up, but they also don’t have to reduce their rates if base rates go down.

What is a fixed rate?

A Fixed Rate means the rate of interest, and therefore your repayments will not change for the period stated or selected. This may be for typically two or three years and is sometimes chosen to help customers budget monthly for the repayments without the worry of it going up. At the end of the fixed rate period chosen the rate will revert back to a ‘Variable Rate’ and as the name implies, some changes in repayment amount may occur – see above section of FAQ.

9.1% APRC Representative

Representative example: Assumed borrowing of £18,000 over 120 months, with a fixed borrowing rate of 6.5% per annum for the first 60 months, followed by 60 months at the lender’s standard variable borrowing rate of 4.95% above Bank of England Base Rate. There would be 60 monthly instalments of £227.38 followed by 60 instalments of £221.71. Total amount payable £26,945.40 comprised of; loan amount (£18,000); interest (£6,920.40); Broker fee (£1,530); Lender fee (£495). This would result in an overall cost of 9.1% APRC. Minimum Term 12 months. Maximum Term 300 months. Maximum APR charged 49.9%.