Secured Loan Rates

Representative Example: A secured loan of £39,000 payable over 8 years on a fixed rate of 10.19% for the first 5 years, followed by a variable rate, currently 11.95%, would require 60 monthly payments of £633.88 followed by 36 monthly payments of £650.21. The total amount repayable would be £61,440.36, this includes interest, an arrangement fee of £1,999 and a processing fee of £499.  The overall cost for comparison is 12.9% APRC representative.

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Secured loan rates

The interest rate of your secured loan depends on various different factors, including the amount of money you are looking to borrow, the repayment term and other factors relating to your credit history.

Interest rates on secured loans tend to be lower than what you would be charged on unsecured loans, this is because the money is secured against your home.

Lenders check your credit score to understand how much you could afford and your financial circumstances. Interest rates are likely to be higher for someone that has bad credit. This is because they are considered more of a risk due to their financial history.

However, as a specialist lender with flexible criteria we can help people with complex financial circumstances.

All applications, whether you have good or bad credit are considered on an individual basis - whatever your credit circumstances, we will do our best to help you get the secured loan you need.

Different types of secured loan rates

There are two different types of interest rates that secured loans can have, a fixed rate or variable rate. It’s important to understand how interest rates work and how they can affect you.

The rate you are charged will determine how much your monthly repayments will be. It also affects the amount you will pay back overall.

A fixed interest rate means you are charged a fixed amount every month throughout the term of the loan. This means that your monthly repayments won’t change, unlike a variable rate. Fixed rates are often considered a safer option, particularly in times of uncertainty. It can be useful to know exactly what you are required to pay each month, making budgeting easier.

A secured loan with a variable interest rate means that the rate you receive when taking out the loan can change. The interest rate changes when the Bank of England base rates changes, therefore some months your repayments could cost more than others. Equally, you may end up with a lower rate with a lower monthly repayment.

If interest rates increase you could end up repaying a lot more than you originally budgeted for. If you are unsure about being able to afford increased repayments, or you want the certainty of a fixed repayment amount, a fixed interest rate may be more suitable. A variable rate is often seen as a more risky option, that’s harder to budget with.

How much could I borrow?

How much do secured loans cost?

Similar to other loans, the main costs of a secured loan are the fees and interest rate.

As well as your repayment term, the rate of the secured loan you are offered will determine how much your monthly payment will be. Ultimately, this will affect the amount you will pay back overall.

Like any type of loan there are fees that come attached. The most common types of fees are arrangement fees (also known as lender fees), broker fees and early repayment fees.

As a direct lender we don’t charge a broker fee, only a lender fee applies. This also means that by going direct with us there no middle men involved and we can provide you with a lender decision fast.

Early repayment fees (ERC’s) may apply to you loan. This means if you wish to repay the money you’ve borrowed back earlier than planned, an early repayment charge may stand. The amount depends on the lender, so it’s important to bare this in mind then agreeing to your loan.

What to consider when taking out a secured loan?

There are various factors to consider when taking out a secured loan. By securing your loan to your home, you are proving to the lender that you can and will be able to pay them back.

It’s therefore important to understand the risks associated with this type of loan. If you fail to make your monthly repayments, the lender can repossess your property, although this is usually the last resort.

It’s important to assess your finances when considering a secured loan. Whilst the lender will assess your affordability, you should also ensure that you can afford to make the monthly repayments over the term of the mortgage. To check this, simply calculate how
much you could realistically afford to repay every month, taking your monthly expenses into consideration.

Whether you have a good or bad credit score, lenders will still want to check your affordability, so they will ask questions about your financial circumstances. They will likely complete a soft and hard credit search at some point of your application. This may influence their decision as to whether or not they will lend you the money.

There are other factors that lenders will take into account when considering you for a secured loan. Most lenders will look at your income, other loans you are currently paying off, the equity in your home and your monthly expenses. However, all lenders have their own criteria so this may differ.