Secured Loans

Secured loans or homeowner loans (if you prefer) are loans that are taken out against your assets such as your property.

CAUTION: If you think that you may fail to make your monthly payments then the lender may seize your home, which is the risk associated with a loan of this type.

 

If you would rather not take a loan out against your home then a personal loan is still a great option, although you will not be able to borrow as much. We have a list of lenders who specialise in personal loans for people with adverse credit.

Secured loans are great for any purpose, this means that you can take a holiday that you’ve always wanted, pay for your child’s university fees or just consolidate and pay off your other debts.

Why an Adverse Credit Home Loan

If you have had arrears from loan payments, or credit card payments, CCJs, bankruptcy and loans, numerous job changes and cheque bounces (as well as other factors) then this has a negative effect on your credit report and an adverse credit loan is likely to be the only loan you can get if you have to have one.

So if you have suffer from one of the above factors then you may have adverse credit history and as a result a poor credit rating. This is where owning a home could give you an advantage over somebody in a similar situation who does not own a property. This is because with a property, a lender will consider you for a secured loan even if you have adverse credit as your house is used as a guarantee. Bare in mind that with secured loans, all lenders are at an advantage as you either repay their loan fully with all the interest or they will seize your home.

 

How long will it take to pay off a home loan?

This depends on how much you can pay off each month and the idea of adverse credit home loans is that the interest is much higher over a longer period of time, possibly up to 25-30 years meaning you will have to pay a lot of interest back.

 

The amount you can borrow is dependant on the value of the home and obviously you get to borrow more money then a personal loan as your home is used by the lenders in case you default on payment.

Remortgage vs. Secured loan

You may be looking at the idea of either remortgaging or getting a home loan. If you are then it is worth considering that a remortgage may be more costly if replacing your current mortgage deal with another that shows increased risk (reflected in higher interest rates) due to poor credit and arrears in payments.

 

It is also worth noting that the remortgage can take up to 6 weeks to complete whereas a secured loan can be resolved within 2 to 3 weeks, so if time is a consideration then a secured loan may be best.

Sometimes a remortgage may incur additional expense such as legal fees, arrangement fees and the like whereas the nature of secured loans means that there are no up front fees. Although you will have to weigh this up against the fact that with a secured loan, rates are higher although you may ending up paying more overall.

As with anything, before you apply for a home loan make sure that you do your research and make sure that you can afford to meet the monthly repayments. The only requirements for having a secured loan is that you are employed and can afford the monthly payments.

 

We have compiled a list of lenders who offer secured loans for people with adverse credit.