“Secured loans Northern Ireland” has been searched by lots of locals considering a secured loan to pay for holidays, cars, home improvements and much more. 

Get the details on secured loans in Northern Ireland here to help you make the right decision for your family. 

Secured loans defined

A secured loan can be defined as a loan where the borrower uses one of their assets as collateral in case they cannot keep up repayments. The opposite of this is an unsecured loan where no assets are used as security in the loan agreement.

The most common assets used to secure a personal loan is property or home equity. Securing debts against your home puts your home at risk of repossession. 

You should think carefully before securing a loan with any asset and only consider lenders that are authorised and regulated by the Financial Conduct Authority (FCA). 

The difference between unsecured loans and secured loans

The main difference between secured and unsecured loans is that the former requires an asset used as collateral and the latter does not. There are further differences as a consequence of this difference. For example, without an asset used as security, you may not be able to borrow as much compared to what is available through secured loans. 

How does a secured loan work?

Secured loans come in different shapes and sizes from homeowner loans and second charge mortgages to secured debt consolidation loans. Most of them provide the loan amount in a single lump-sum payment. This money needs to be repaid via monthly payments over a fixed period. If you stop repaying for whatever reason, the lender can then repossess the asset used as security and sell it, possibly through an auction house. 

Can you get a secured loan in Northern Ireland?

Secured loans are widely available in Northern Ireland (NI). You may be able to get a secured loan from local banks and local loan providers, or get these personal loans from providers that also lend to people across the rest of the UK. 

To be approved for a secured loan in Northern Ireland, you must pass an affordability test set by the lender and have your credit history assessed. 

Are secured loans easier to get?

Secured loans are thought to be easier to get approval for than unsecured loans due to the asset used as collateral. However, anyone applying for a secured loan in Northern Ireland will still need to pass an affordability test. 

The pros and cons of secured loans in Northern Ireland

Any type of credit comes with benefits and drawbacks. There are two predominant benefits of using a secured loan, which may or may not be relevant or come to fruition. They are:

  1. Secured loans may enable the borrower to borrow more money
  2. Secured loans may provide competitive interest rates

The drawbacks of a secured loan in Northern Ireland, or anywhere else in the UK, are that they create a risk to your asset, and there may be additional fees to pay. You could have to pay a fee to have your property revalued, and you might have to pay closing costs. 

How do I get a secured loan?

To get a secured loan in Northern Ireland, you will first need to meet the eligibility criteria of the lender. This usually means having a certain level of income, owning the asset required as collateral and being of a certain age and a UK tax resident. 

The company will assess how much of your monthly income is required to make the loan repayments and any other debt payments you have ongoing, such as a mortgage. If too great a percentage of your income is needed to repay all debts, the loan will be deemed unaffordable and you will be rejected. There is no fixed percentage your debts must be under as each lender can apply its own assessment. 

Where is the best place to get a secured loan?

Secured loans in Northern Ireland are often advertised at local banks and financial institutions. People living in Northern Ireland can also use online loan providers that are operating across the whole of the UK. The best secured loans in Northern Ireland have interest rates below 10%, and they can be as low as 2-3% in some cases. 

To get the best loans you should complete extensive and meticulous research, or you may want to engage a broker or financial advisor for tailored support. These services come at a cost. Otherwise, you could use secured loan comparison websites specifically for those based in Northern Ireland. They do exist! 

One example is CompareNI.com. 

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Secured loans Northern Ireland – example only!

The big high-street banks in Northern Ireland are offering secured loans at the time of writing. And you can get secured loans in Northern Ireland from a range of online providers. 

One example of a credit broker (not a direct lender) offering these loans to locals is Choice Personal Loans. They may not be the best lender to choose and are mentioned as an example only. You could take out as much as £50,000 with a secured loan through this brokerage. 

What credit score is needed for a secured loan in NI?

To get a secured loan in Northern Ireland there is no benchmark that your credit score must meet or surpass. Every lender is allowed to complete its own affordability checks and credit score assessment. It is an accumulation of information that decides the outcome of the application. 

Of course, the lower your credit score the better your chance of getting approved – and the more likely you are of securing a lower interest rate. 

Is it bad to get a secured loan?

Taking out a secured loan can be a smart way to get a larger loan amount at a competitive interest rate. Secured loans may be especially beneficial to complete home improvements or consolidate debts. 

However, there is the underlying risk when taking out a secured loan that you could lose your asset. Although you can afford the loan repayments at the time of approval, nobody can be sure of what the future holds. Thus it is not exactly bad to get a secured loan but there is an element of risk to be aware of. 

Discover more about secured loans in Northern Ireland 

This guide covers the basics surrounding secured loans in Northern Ireland. For more information and related FAQs answered, click back to the MoneyNerd blog again soon. 

All our guides are made easy to read with simple examples, kicking confusing jargon into touch.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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