What are home UK secured loans?
Home UK secured loans are loans offered in the United Kingdom to customers who are willing to offset their loans against something that they already own. The majority of home UK secured loans will be offset against equity in the home, thus the name, although some customers may be able to secure their loan against other assets, such as a business, artwork, a car or jewellery.
Home UK secured loans are typically offered with a lower interest rate than a standard personal loan, or an unsecured loan, because there is less risk to the lender. This is because the lender is entitled to repossess the asset the borrower has secured against the loan, and sell it to recoup their investment.
Failure to keep up repayments on a home UK secured loan can lead to repossession of your home, so it’s important to be sure you can afford the monthly repayments when you take one out.
How much can I borrow with home UK secured loans?
The amount of money you can borrow with home UK secured loans will depend on your own circumstances, and your credit score, as well as the amount of money a bank is willing to lend you.
To work out how much you can borrow, based on your home equity assets, you need to work out how much equity you have in your home. This is a relatively simple calculation and you simply take the value of your outstanding mortgage away from the value of your home.
If you find that your home is worth less than your mortgage you are said to be in negative equity and home UK secured loans may not be for you.
Why do people take out home UK secured loans?
There are lots of reasons why people take out home UK secured loans, with many people simply taking out the relatively low interest loans to consolidate more expensive credit and store card debts.
One of the most common reasons for home UK secured loans are to make home improvements, with customers using the money to pay for loft and garage conversions, conservatory and general extensions which will increase the value of the home at the same time, making them a more attractive reason to lend you the money for prospective lenders.