Best Secured Loans – Complete Comparison

Welcome to our guide on the ‘Best Secured Loans – Complete Comparison’. This guide is here to answer your questions, making the world of secured loans clear and simple. 

We understand that finding the right secured loan can be a bit scary – you might be worried about the risks or how much it can cost. But you’re not alone. Every month, over 6,900 people visit our website seeking advice on secured loans

In this straightforward guide, we’ll cover:

• What a secured loan is.
• The real cost of a bad secured loan.
• Examples of secured loans.
• How a secured loan works.
• What to do if you can’t afford your monthly repayments.

Remember, you’re not on your own – lots of people need help understanding secured loans. We’re here to give you clear and simple advice.

Let’s dive in and learn more about secured loans together.

Which banks offer secured loans?

Most UK banks offer all of the secured loan types mentioned earlier – and others. Sometimes, these loans are advertised on the bank’s website, where you can access specifics about the loan and maybe even apply for the loan.

But some banks don’t provide specific details about these loans online and ask potential customers to enquire in branch, possibly by making an appointment first. 

Some of the best secured loans – i.e. lowest interest rates – are usually but not exclusively available through banks. As you compare loans to find the best rates, make sure you check out all the high-street UK banks, either in person or by visiting their website. 

What companies offer secured loans?

Along with UK banks, a number of online loan providers advertise secured loans in the UK. Some online websites advertising secured loans are a broker, not a lender. This means they use your information to search through a vast number of partners to find a loan you may be approved for. 

Although this can be good in some regards, you may miss out on the best secured loans if they are not partnered with the best loan lenders. Your loans could cost more by using a broker due to hidden fees, and as you repay the loan, you may actually be paying some sort of commission. 

If you decide to apply for a secured loan with an online lender, make sure you only apply to ones that are authorised and regulated by the Financial Conduct Authority. You might also find these loans advertised by building societies, mortgage specialists and even supermarket finance departments. 

What is the Financial Conduct Authority?

The Financial Conduct Authority regulates financial services firms and financial markets in the UK. It aims to protect consumers, keep the industry stable, and promote healthy competition between financial service providers. 

Where is the best place to get a secured loan?

Although banks typically have lower representative interest rates than online loan providers, there are still some online companies that offer equally or even better representative example rates than some banks. You’ll need to search and compare loans across the market to get the best deals. 

However, notice that “representative” is mentioned above. The best place to get a secured loan for one person may not offer the best deal for another person. The interest and terms of a secured loan can differ with the same lender because offers are made based on personal finances and your credit score. 

What are the best secured loans interest rates?

The best secured loan interest rates depend on the amount you want to borrow. What is considered a low interest rate for one amount may not be the lowest on the market if borrowing a significantly different amount. Nevertheless, the lowest interest rates on secured loans are between 2% and 5%. Getting a secured loan with an interest rate below 10% is considered a good deal for most people. 

Some loans come with a fixed rate of interest that remains the same throughout all your monthly payments. But others use a variable interest rate that can change up to eight times per year based on the economy and the Bank of England base rate, as decided by a committee at the Bank of England known as the MPC. 

Secured loans for all purposes

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What are the best secured loans?

The best secured loans are decided by two main factors:

1. The current market
2. Your personal situation

The loan market can change rapidly and change which lender is offering the lowest representative rates. And your personal situation will always determine if you can get offered the lowest rates. 

Thus, it is not possible to straight-up answer this question, but it is recommended to check out the big banks as they often have low representative rates, and you know they’re a direct lender without fees hidden in monthly payments.

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What to consider when looking at secured loans?

When looking for these loans, it’s important to look at more than just the interest. Of course, the rate of interest is important and will influence the overall cost of the secure loan, but it’s not the only thing to look for. You should also check:

1. Closing costs – some loans have a closing cost between 2-5% of the total loan amount, meaning a significant final payment is needed to end the loan on bigger loans. 
2. Early repayment fees – if you might pay back the loan early, check what charges are payable before you take out a secured loan. 
3. Appraisal fees – the lender may want to value the asset being used as security, and there may be fees to pay as part of the process.
4. Additional loan or admin costs – some secured loans have additional fees, often related to administration processes. 

It’s really important that you always read the fine print and properly consider the loan duration to make sure it is right for you and your situation.

How to compare secured loans

To compare secured loans and find the best secured loans at the time of reading, you should do updated research on the market. You might want to start off by using a third-party comparison website but then progress into your own independent research. 

Create a spreadsheet to keep track of the different representative rates advertised as well as the four possible additional loan costs above. This will help you make easy and accurate comparisons. 

Secured loan calculators

Secured loan calculators are a great way to see how much your loan repayments will cost. These are found on lender websites and allow you to enter how much you want to borrow and the length of time needed to repay. They will then show all the secured loan costs and how much monthly payments will cost. 

But be aware that they are not entirely accurate, and your repayments could be different. They are based on a 51% average only. 

How much can I borrow with a secured loan?

Most secured loans are available from between £3,000 to £100,000, whereas unsecured loans usually offer credit from as little as £500 to a maximum of £25,000. This means you can borrow much more using a secured loan, but you could borrow smaller amounts with an unsecured loan. 

There are some secured loans that could allow you to borrow even more than £100,000. Those that borrow against home equity may enable even bigger borrowing. 

Homeowners can sometimes borrow as much as 80% of their equity. If you were to have £200,000 equity, this means taking out a secured loan for above £100,000 is easily possible, but it will depend on personal finances and whether you have a good credit score or a poor credit rating.