Types of Secured Loans

Secured loans may be available for a wide number of purposes.

As part of your application, you may need to explain to the potential loan provider exactly what the borrowing is required for.

This is important, as different loan purposes attract different risk assessments from lenders. As a general principle, the lower they perceive the risk to be, then the lower the interest rate they may be able to offer you.

By definition, secured loans require you to offer some form of security, usually in the form of an asset, which acts as a guarantee for the loan. The most commonly used security is your home (and this is why some loans are referred to as homeowner loans).

It may be possible to use your property as security even if it is owned in joint names, though you will need the support and agreement of the co-owner.

Some forms of secured loans are described as:

  • Debt Consolidation Loans – this is a method of paying off a number of other debts with a single loan taken out at a more advantageous interest rate than you were obtaining on the other individual debts;
  • Car Loans – you may find that a secured loan obtained through your own financing may be more cost-effective than looking for car finance through a dealership etc;
  • Self-Employed Loans – historically these may have been rather difficult to find, however, things are changing as the percentage of self-employed people in the economy increases;
  • Bad Credit Loans – if you have credit history problems then you may need a certain type of product that takes into account the fact that some providers may see you as being a slightly higher risk;
  • Wedding Loans – the cost of anything other than most basic wedding is now so high as to mean people may value the assistance that secured loans may be able to offer;
  • Holiday Loans – if you are considering that holiday of a lifetime for a special event, then borrowing money this way may be something that is able to help you make it happen.
  • You may find that potential providers welcome applications for many, if not all, of these types of credit.

    A common type of borrowing is the secured home improvement loan. Typically if you renovate a kitchen or add a garage then the value of your property will also increase, sometimes significantly, so investing in your property could actually see you make money when you come to sell it.

    Home improvement loans may include things such as:

    • new kitchens or bathrooms;
    • extensions;
    • landscaping of your garden;
    • conservatories;
    • new home furnishings;
    • any other home improvement purposes.

    Different providers may specialise in different types of loan for different purposes. It is sometimes useful to have help in understanding which providers may be particularly suitable for a given type of loan, so using the services of a loan specialist may be worth considering.

    Of course, any provider of secured loans may need to decline your application for a number of reasons, which they may or may not wish to share with you. It might also be a good idea to keep in mind that your home may be at risk if you are unable to keep up the repayments on a loan secured against it.


SecuredLoans.com is a credit broker. In the case of unsecured loans, the REPRESENTATIVE APR is 9.3% variable. 51% of borrowers get this rate or less Representative example: - £10000 over 60 months at an interest rate of 9.3% per annum. Monthly repayment £206.86. Total amount payable £12416.46.


65% of secured loan borrowers should get rates less than our TYPICAL 13.8% APR including those who have credit problems. APR’s are variable in most cases. In some cases a secured loan processing cost may be charged, which is deducted from the loan on completion and included in the interest rate quoted. This charge covers the cost of property valuation, mortgage references, consent to register a second charge, land registry search’s, credit references, staff costs, marketing and variable costs associated with your loan and is on average 8% of the loan amount. The amount of any fee and the actual rate available will depend on your circumstances and will be discussed with you at an early stage. Extending the loan over a longer period can reduce your monthly payments but may increase the total cost of credit.