Category: secured-loans

£20,000 is a significant sum that can help you satisfy a range of financial needs and desires. In a secured £20,000 loan, you provide a valuable asset as collateral for the lender, usually your home.

A £20,000 loan provides the financing you need for things you may not afford with regular income without years of saving. Here are some essential things to know about a £20,000 loan.

How Does A £20,000 Loan Work?

The application process for a £20,000 loan is quick and easy. You could get an instant lending decision depending on individual circumstances, Thanks to an online evaluation of your home’s value, most lenders will not require a home visit.

There are no hidden charges or fees, You’ll also have different repayment options to choose from for a £20,000 loan.

You can choose to repay from 12 to 240 months, depending on your financial and personal situation.

The rate of interest you’ll be charged for the loan will depend on the chosen timeframe. Generally, shorter repayment periods result in smaller total repayable amounts. With more extended periods, you’ll get lower interest rates and repayment amounts, but you’ll repay a higher overall amount by the end of the loan term.

Apply for a Secured Loan Today

Suitability Of A £20,000 Loan

You’re free to use a £20,000 loan for any purpose. These include:

• Personal Financing

A secured £20,000 loan can come in handy when you need to finance big or small personal needs and purchases. There are no restrictions to how you use the funds. They can help you when you need to buy another home, land, a car, advance your education, go on a much-needed vacation or finance the wedding of your dreams.

• Home Improvements

Home improvements are a great way of reinvesting back into your property and enhancing its value, but they can be very costly. A secured £20,000 loan will enable you to cover the costs of those renovations you’ve been eyeing. You can use it for a new kitchen, bathroom, extensions, conversions, or any needed repairs.

• Debt Consolidation

A £20,000 loan is an excellent option if you have many debts and are looking for a way to streamline them into one manageable debt. It can help you get the funds needed to cover the total debt from different creditors and drastically reduce your monthly expenses.

You’ll only be left with one debt to repay each month which makes debt consolidation an excellent option for people in financial distress. You won’t have to deal with multiple lenders, and a secured £20,000 loan features long repayment periods that reduce the amount you have to pay out each month.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

£20,000 Loan with Bad Credit

You can still be considered for a £20,000 loan even if you have a bad credit history. Whether your negative credit score is due to late payments, defaults, county court judgements (CCJs), or you’re on a debt management plan, a £20,000 loan is still within your reach.

Because the £20,000 loan is secured, the risk to the lender is significantly reduced regardless of your credit score. A loans advisor can help you find specialized lenders who focus on helping borrowers with insufficient credit access financing solutions.

A secured £20,000 loan is more accessible if you have a less than adequate credit history. Unlike unsecured loans, your credit score will not disqualify your approval. Plus, you’ll get easy monthly repayments that will help you improve your credit score.

Risks Of A £20,000 Loan

The significant risk of a secured £20,000 loan is losing your home if you default or fail to make repayments. Because you’ve secured the loan against your home, the lender can repossess it and sell it as a last resort to recover the loan.

The lender can also take you to court, and you can be prosecuted for defaulting. You can also face penalty fees and a negative score on your credit report, limiting the amount you can borrow in the future.

It’s vital to ensure you can comfortably repay the £20,000 loan before you apply and secure it with your home. Carefully consider your affordability and monthly budget over the chosen repayment term to avoid losing your home and other costly penalties.

Apply for a Secured Loan Today

Other Costs To Consider

Loan Fees

Depending on the lender, you may be charged upfront fees like arrangement fees or account fees to set up the £20,000 loan. If your contract doesn’t allow early repayment, you may be charged early repayment fees if you choose to pay off your loan early.

Before you sign an agreement with a lender, always ensure you carefully review the contract and inquire about the total amount payable for the £20,000 loan, including the interest, costs and possible fees.

Valuation Fees

While most lenders may allow an online valuation, some may require a physical valuation to ensure the property is worth the value. Although the lender will arrange for such valuations, you may be required to cover the costs, which can vary depending on the location, property’s value, and the deal’s terms.

Solicitor Fees

Since you’re securing the loan against your home, a property solicitor may be necessary to handle the legal aspects of the loan agreement. You may be charged a flat fee or a percentage of the property price.

Insurance Fees

Lenders may also require that the home you use to secure the £20,000 loan be insured before entering into a contract with you. Insurance guarantees coverage from any damage to the structure of the property and ensures it remains valuable.

Frequently Asked Questions About A £20,000 Loan

Can I Compare £20,000 loans Without Affecting My Credit Score?

Yes. Most lenders offer soft searches or smart searches that don’t appear on your credit report. A £20,000 loan is a significant amount, and it’s necessary to conduct your research and shop around for the best deal that suits your circumstances. Eligibility checkers will also help you easily confirm your eligibility with no obligation or effect on your credit score.

Apply for a Secured Loan Today

£20,000 Loans with Bad Credit – How Can We Help?

There’s no doubt that secured loans are great for those with bad credit but as mentioned previously, taking out a secured loan is a major life decision that’s not to be taken lightly and nobody should have to make that choice alone!

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

A secured loan is a loan that is protected by collateral. Collateral is a valuable asset that you pledge as security for the repayment of the loan.

In most cases, you’ll secure a loan with the underlying purchase being financed, such as a home.

How Does a Secured Loan Work?

A secured loan is backed by some form of collateral. Once you qualify for a secured loan, the lender places a lien on the collateral, giving them the right to seize the collateral in case of a default.

If you default on a secured loan, the lender can foreclose, repossess to recoup the outstanding balance.

As a result, a secured loan poses less risk for lenders, and they can extend the loan with lower interest rates and requirements than unsecured loans.

Secured Loans vs. Unsecured Loans

In simple terms, a secured loan requires borrowers to provide collateral, while an unsecured loan does not. This major difference impacts your interest rate, borrowing limit, and repayment terms.

Typically, a secured loan is larger and has a more extended repayment period than an unsecured loan and is offered with more competitive interest rates.

Advantages of Secured Loans 

A secured loan is an excellent option if you’re looking for large sums you can repay over a more extended period, here are some of the major features of them:

• Higher Loan Amounts

Secured loans allow you to access a large lump sum of cash than unsecured loans. The value of your asset can influence the amount you can borrow. Usually, the more valuable your property is, the more money you can borrow in a secured loan.

Apply for a Secured Loan Today

• Low-Interest Rates

Thanks to the lender’s low risk in a secured loan, you can access more favourable interest rates. Repayments in a secured loan are also spread over a long period. Lenders can make their money over the long term, making them more willing to advance secured loans at attractive interest rates.

• Instalment Payments

While short-term unsecured loans may require you to repay in one lump sum, secured loans are repaid in small manageable instalments over the loan’s term.

Lenders will outline a repayment plan when entering a secured loan agreement, making it easy to plan monthly payments. The instalments are usually fixed and will include a portion of the principal amount plus interest spread evenly over the loan’s duration.

What Can a Secured Loan Be Used For? 

A secured loan provides you with cash to cover anything, whether big or small, common uses of secured loans include the following examples:

Personal and Business Needs

Businesses usually need a cash injection for current and future needs like purchasing resources, stock, equipment or expansion into new premises. A secured loan can come in handy when you need a financial boost for your business.

Secured loans can also finance different personal financial needs and purchases. You can use it to buy a home, car, advance your education, finance a family vacation or the wedding of your dreams.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Home Improvements

Funding a home improvement project can be expensive, but it’s a great way to reinvest and improve the value of your property. A secured loan can help you cover the costs of your desired or needed improvements.

Whether it’s a new kitchen, bathroom, extensions, conversions, repairs or maintenance, a secured loan can help you fulfil your needs.

Debt Consolidation

Debt consolidation involves streamlining multiple debts into one debt. Instead of dealing with different creditors every month, you acquire a loan to cover the total debt and make a single payment to a single lender monthly.

If you’ve been struggling under the weight of multiple high-interest debts, a secured loan can help you consolidate your debts and give you a breath of fresh air. It will provide the funds to pay down your debts and drastically reduce your monthly expenses.

Multiple debts become easier to manage because you only deal with one lender instead of many with an extended repayment period and favourable interest rates.

Secured Loans with Bad Credit

A secured loan has less rigorous qualification requirements than an unsecured loan. You can still qualify and get approved even with a bad credit history because the collateral significantly reduces the lender’s risk despite your credit score.

Whether you have a negative credit score due to defaults, late payments, or county court judgements (CCJs), you can still access a secured loan. If you’ve been denied a loan because of your credit history, consider providing an asset as collateral to improve your chances of approval.

Unlike unsecured loans, credit score requirements in secured loans are generally lower. Loans advisors can even connect you to lenders who specialise in offering secured loans to borrowers with bad and non-existent credit scores. They work with you to ensure you get an affordable secured loan that you can quickly repay and improve your credit score!

Apply for a Secured Loan Today

Types Of Secured Loans

You can access different types of secured loans in the UK, including:

• Homeowner or home equity loans

It involves getting a further advance on your mortgage and borrowing additional amounts from your current mortgage lender against your home. They can come in handy when you need to make home improvements or raise a deposit for a second or more expensive home.

• First and second charge mortgages

First charge mortgages involve taking out a loan against your home when you have no existing mortgages. With second charge mortgages, you set up a separate agreement from your current mortgage, either with an existing mortgage lender or a different one.

What Types of Collateral are Used to Back a Secured Loan?

A secured loan is often the only method of securing a large amount of money. Almost any type of high-value item can be used as collateral as long as it’s lawful.

However, acceptable forms of collateral will usually be specified by the lender and will also depend on whether the loan is for personal or business use. Examples of common forms of collateral include the following:

• Your home or business property.
• Cars and other vehicles.
• Machinery and equipment.

What Happens If You Don’t Repay a Secured Loan?

The most significant risk of defaulting on a secured loan is losing your home. The lender seizes the collateral and can sell it as a last resort to recoup the outstanding balance.

If it’s a mortgage, they can file a foreclosure action against you.

Because the collateral’s value meets or exceeds the loan amount, the lender has higher chances of limiting their losses if you default.

If the sale of the collateral doesn’t cover the total outstanding balance, you’ll still be liable for the remaining amount. Lenders can attempt to recover the difference through legal actions where you’re prosecuted in court. Your credit will be impacted negatively, and repossession can stay in your credit report for up to six years in the UK.

How To Get The Best Deal On A Secured Loan?

Before taking out a secured loan, it’s essential to review your income, existing debt payments and budget to determine whether you can afford monthly repayments.

After determining how much you can afford to borrow, shop around for the best loan. Research the cost of borrowing, the terms and conditions of each loan and the consequences of being unable to repay.

Look for lenders who offer prequalification without hard credit checks that will impact your credit score. Eligibility checkers, soft credit searches or quotation searches are helpful when you’re shopping around and not ready to apply. They’ll not show up on your credit reference file.

Apply for a Secured Loan Today

Secured Loans – How Can We Help?

There’s no doubt that secured loans are great for those with bad credit but as mentioned previously, taking out a secured loan is a major life decision that’s not to be taken lightly and nobody should have to make that choice alone!

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

A 10-year secured loan involves borrowing money and securing it using an asset known as collateral.

With a 10-year secured loan, you can repay the amount borrowed plus interest over a decade through fixed and manageable repayments.

The equity tied to your home can be used, and they’re sometimes referred to as homeowner loans or second charge mortgages.

Features Of A 10-Year Secured Loan

A 10-year secured loan is perfect if you’re looking for a large loan you can repay over a long time.

Features include:

High Loan Amounts

10-year secured loans allow you to borrow a more considerable sum of money than unsecured loans. The value of your home may influence the amount you can borrow. The more valuable your property is, the more money you can borrow in a 10-year secured loan.

Apply for a Secured Loan Today

Low-Interest Rates

You’ll get more favourable interest rates with 10-year secured loans because they’re less risky for the lender. The rates are also low because repayments are spread over a long period of 10 years. Lenders will make their money over the long term, making them more willing to advance attractive interest rates.

Instalment Payments

Unlike short term loans where you repay in a lump sum, you’ll repay a 10-year secured loan in small manageable instalments. You’ll get a repayment plan outlined over ten years right from the outset, which makes it easy to plan for monthly payments.

The monthly payment will include a percentage of the principal amount plus interest spread evenly over 120 months. The instalment payments are usually fixed over the duration 0f the loan, in this case, ten years.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Uses of a 10-Year Secured Loan

You can use a 10-year secured loan for almost anything, whether big or small, these include:

• Home Improvement

Home improvements can be costly, but they’re a great way to invest back into your property and improve its value. A 10-year secured loan can help you get the financing you need to cover the costs of your desired goals. Whether it’s a new bathroom, kitchen, conversions or extensions, a 10-year secured loan will help you fulfil your renovation needs.

• Debt Consolidation

If you’ve been struggling under the weight of unmanageable debt, consider taking out a 10-year secured loan for debt consolidation. It will help you combine multiple high-interest debts into one for easier management and repayments. With high loan amounts in 10-year secured loans, you can consolidate your debt and only deal with one lender instead of many.

• Personal and Business Financing

Big and small personal financial needs or purchases can be financed with a 10-year secured loan. You can use it to buy land, a car, a home, finance the wedding of your dreams, education advancement or simply taking your family on vacation.

A 10-year secured loan can also come in handy when you need a cash injection for your business to finance needs like stock, resources and equipment, expansion or investing in new premises.

Apply for a Secured Loan Today

10-Year Secured Loan with Bad Credit

The best part about 10-year secured loans is that you may get approved even if you have a bad credit history. Unlike unsecured loans, where you may need a good credit score for approval, you won’t have to worry about that with a 10-year secured loan. It’s an excellent and more accessible choice if you have a poor credit score, and you can borrow more considerable sums for longer.

Risks of a 10-Year Secured Loan

One of the significant risks with a 10-year secured loan involves missing repayments or defaulting. If you fail to repay the loan, the lender can repossess the asset used as collateral and sell it to recover the loan.

You can lose your home, and it’s vital to ensure you only borrow what you can comfortably repay over the next decade. Additionally, you could face penalty fees, court prosecution and a negative credit report if you fail to keep up with repayments.

While the interest rates and monthly repayments may be lower, you’ll repay a higher amount overall by the end of the ten years. The interest will be charged over a more extended period compared to short term loans.

Ensure you carefully consider your affordability before securing a 10-year secured loan against your home.

Eligibility for a 10-Year Secured Loan

While different lenders will use their criteria to determine eligibility, most will require that:

• You’re 18 years and older.
• You’re a resident of the UK.
• You have identity proof like a valid driving license or passport.
• You have proof of address, like a recent utility bill.
• You have proof of income or employment status.

Having the details and documents ready when applying can help confirm who you are and expedite the process.

FAQ About 10-Year Secured Loans

How Long Will It Take to Get a 10-Year Secured Loan?

Unlike unsecured loans, the asset you use as security for a 10-year secured loan may need to be valued by the lender. Often this is done electronically. The process could take a few weeks depending on the application process before you receive the money into your account.

Are There Other Fees for a 10-Year Secured Loan?

Depending on the lender, you may have to pay arrangement fees, account fees or early repayment fees if you decide to pay off your loan early. Before signing the agreement with a lender, always read the terms carefully and inquire about the total amount payable, considering the interest charged, costs and fees of a 10-year secured loan.

To avoid damaging your credit score and potentially losing your asset, always make your repayments on time and in full according to your loan agreement.

Apply for a Secured Loan Today

Secured 10 Year Loans – How Can We Help?

There’s no doubt that secured 10 year loans are great for those with bad credit but as mentioned previously, taking out a secured loan is a major life decision that’s not to be taken lightly and nobody should have to make that choice alone!

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Long term loans refer to loans that have a longer tenure or repayment period.

When you borrow a long term, you’ll get a more extended repayment plan of a year or more, even with bad credit.

There are lenders in the UK who specialize exclusively in lending to those with poor credit scores.

Long term loans for bad credit are designed to be paid off over more extended periods than typical payday loans or short-term loans.

You can spread the costs of repayments from one year to up to 20 or 30 years!

Here’s everything you need to know about long term loans for bad credit in the UK:

Getting Long-Term Loans For Bad Credit

Lenders specializing in helping those with bad credit scores are less fixated on the borrower’s credit history.

The term is broad, and you can be deemed a bad credit borrower for various reasons.

Having bad credit simply means you have negative scores on your credit report because you failed to repay a previous loan in full, were bankrupt, or defaulted on a loan.

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It can even be that you made one late payment on a loan in the past, and although this shouldn’t be held against you, it often is.

Even a non-existent credit history can have you labelled as a bad credit borrower.

This can be the case if:

• You recently relocated to the UK and have a zero-credit history since they can’t be transferred across borders.
• You’re a young adult who hasn’t built their credit history.
• You’ve never borrowed or opened a bank account.

The good news is that specialized lenders will treat you as an individual and not a label.

Based on the facts, they’ll readily help you if you have a less than perfect credit score or no credit history.

Instead of focusing on your credit score, they consider facts like your income, how you handle your finances now and whether you can afford to make monthly repayments in the long term.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Features Of Long-Term Loans For Bad Credit

Your past financial hurdles are not used against you among specialized lenders who offer long term loans for bad credit. Depending on the lender, you may still get the same features of typical long-term loans. These include:

High Loan Amounts

Long term loans for bad credit allow you to borrow more significant amounts and spread the cost into management monthly repayments over a more extended period.

However, some lenders may cap the amount they offer to borrowers with bad credit to limit the risk involved. Even when restricted, you may still get higher limits than shorter-term loans with bad credit.

Low-Interest Rates

You may also get lower interest rates because you have to repay the loan over a long period. Usually, long term loans for bad credit come with lower APR c0mpared to payday and short-term loans.

Lenders are willing to offer attractive interest rates because they’ll make their money over a longer term. Remember, a long-term loan for bad credit may have a higher APR than a usual long-term loan to reflect the risk involved.

Instalment Repayments

Instalment repayments are synonymous with long term loans. Unlike short term loans, where you may have to repay in a lump sum at a specific time, you can easily repay long-term loans for bad credit in small manageable instalments.

This involves regularly scheduled monthly payments that you can easily manage because they’re spread over a longer term of one to 30 years!

Uses Of Long-Term Loans For Bad Credit

Long term loans for bad credit are suitable for all kinds of financial needs, whether big or small. They can come in handy in emergencies and different situations like:

Home Improvement

A home improvement project can be costly, but with a long-term loan, you can get considerable amounts to cover the costs of your desired goals. Your home is your biggest asset, so it’s wise to look for ways to add value to it and invest in your property. Whether it’s a new kitchen, bathroom, extensions or conversions, a long-term loan for bad credit can help you fulfil your renovation needs.

Apply for a Secured Loan Today

Debt Consolidation

It can seem like there’s no way out when you’re struggling under the weight of unmanageable debt. A long-term loan for bad credit can help you combine multiple debts into one for easier repayment and management.

Thanks to the higher amounts offered, you may be able to consolidate your debt and reduce the number of repayments and creditors you have to deal with.

Business and Personal Financing

Businesses often need cash injections for current and future needs like resources, stock, investing in new premises or expansion. You can also use long term loans for bad credit to finance personal goals like buying land, a car, a home, education advancement, weddings or taking your family on vacation.

Security

Lenders may require some kind of collateral as security for long term loans for bad credit. This usually involves linking the loan to an asset like your home, car, stocks, equipment or other valuables.

The asset acts as security until you pay off the loan, and in case you default or fail to repay, they can take possession and sell it as a last result.

You’ll be motivated to repay to avoid losing your property, making it easy to get approved for long term loans even with bad credit. It’s vital to ensure you can afford to make repayments before you apply.

Guarantor

Incorporating a guarantor will open many borrowing doors if you’ve struggled to get long term loans because of bad credit history. Having a guarantor means you have the financial backing of a family member or friend who agrees to meet the loan repayments when you’re unable to pay.

This is encouraged for borrowers who can’t access funding independently because of low income, inadequate credit and other reasons. The loan is effectively guaranteed, allowing the lender to advance long-term loans for bad credit at better rates and terms.

Your guarantor has to have an excellent financial position and credit rating.

Apply for a Secured Loan Today

Long Term Loans For Bad Credit Final Thoughts

Remember, long-term loans for bad credit will have a higher overall borrowing cost because you’ll be repaying the debt over a more extended period that can last decades. However, the monthly repayments will be lower.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Regardless of what prompts your home improvement project, it can be a costly affair.

Funding such projects can be challenging, and this is where home improvement loans come in. They can help you get the financing you need to cover the costs of your desired home improvements.

Qualifying for any type of loan with less than average credit can be difficult, including home improvement loans. However, it’s not impossible.

With the right advice and guidance, you can find various lenders who can offer you home improvement loans with bad credit.

Read on to learn about home improvement loans with bad credit and how you can access them in the UK without breaking a sweat!

What Are Home Improvement Loans With Bad Credit?

Home improvement loans with bad credit are loans designed for borrowers with a less than perfect credit history or those with little to no credit history. Having bad credit simply means you have lower scores in your credit report because of various issues. These can include not repaying a previous loan in full, bankruptcy, or defaulting on a loan.

It can even be that you made a late payment on a loan in the past, and although lenders shouldn’t hold this against you, they often do. It can also be that you simply don’t have any credit history to speak of because;

• You’re a young adult who hasn’t built a credit record.
• You recently relocated to the UK since you can’t transfer credit histories from overseas.
• You’ve never opened a bank account or borrowed credit.

Thankfully, many lenders understand that we all have financial hiccups at one point or another. Instead of solely focusing on your past financial hurdles, they’ll consider your income and how you handle your finances now to offer a home improvement loan with bad credit.

Apply for a Secured Loan Today

How Do Home Improvement Loans With Bad Credit Work?

Home improvement loans with bad credit usually have higher interest rates and more stringent terms than other loans. This is because of the risk that comes with bad credit borrowers. Lenders will offer higher rates to mitigate the risk of you not paying them back.

It’s crucial that you first work out what you can realistically and comfortably repay each month. You can then compare home improvement loans with bad credit from different lenders to find one suitable to your financial needs and ability.

Lenders may cap the maximum amount they can offer to borrowers with bad credit. Ensure you only apply for loans that you’re likely to get to avoid too many credit searches that may impact your credit score. Most lenders allow you to check your eligibility even before you apply.

Keep in mind that each lender will use their criteria when assessing your application, and some may view you more positively than others. Working with a loans adviser can help you get lenders who are most likely to give you a home improvement loan with bad credit.

How To Get Higher Limits and Better Rates

You can do various things to get better rates, higher limits, or qualify for home improvement loans with bad credit. These include:

Having A Guarantor

Having a guarantor can open many borrowing doors for you if you’ve struggled to get home improvement loans with bad credit. It involves having the financial backing of a friend or family member who agrees to meet the loan repayments when you’re unable to pay.

Incorporating a guarantor is suitable for borrowers who find it hard to access funding independently due to bad credit history, low income, or other reasons. The loan is effectively ‘guaranteed’ when someone backs you up, allowing the lender to consider advancing a home improvement loan with bad credit at higher limits and better rates.

Remember, the better the guarantor’s credit rating and financial position, the better the rates and higher the limits lenders will offer you.

Having Security

You can secure a home improvement loan with bad credit by presenting some form of collateral to the lender. This involves linking the loan to an asset like your home, car, bonds, stock, jewellery, equipment, or other valuables.

Lenders can take possession of the asset tied to the loan if you fail to repay.

Apply for a Secured Loan Today

As such, it’s straightforward to get approved for loans if you have security because it reduces the risk for the lender. You’ll also be able to borrow more money for your home improvement project with better rates and repayment terms than you’d otherwise get. The lender knows you’ll be motivated to repay to avoid losing your asset.

Choose A No Credit Check Loan Option

In this type of loan, the lender doesn’t perform a credit check or consider your credit history when deciding whether to approve you for a home improvement loan. Such loans are perfect for individuals with non-existent or bad credit histories.

The lender will only conduct an affordability assessment and verify your income to determine whether you can repay or not instead of focusing on your credit score. It can be a lifesaver if an urgent home improvement like a leaking roof is required and you don’t have a great credit score or don’t want lenders prying into your credit history. With such loans, you’ll usually get a fixed repayment period and interest rate.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Improve Your Credit Score

Checking your credit score is the first step to improving it. You may have a bad credit score due to an error, and checking it at least once a year can ensure any discrepancies are corrected. Paying back any outstanding debts can also help improve your credit score.

Remember, you have the power to influence your credit score through your financial behaviour, and improving it boosts your chances of getting the home improvement loan you want.

Apply for a Secured Loan Today

Managing Home Improvement Loans With Bad Credit

A home improvement loan with bad credit will help with your project and benefit your credit score provided you pay back diligently. Making repayments on time will reflect positively on your credit score, show you’re a reliable borrower, and help you qualify for better deals in the future.

Home Improvement Loans With Bad Credit Final Thoughts

Ensure you have a reasonable monthly budget, so you don’t miss any repayment. It’s also wise to avoid adding further debt while paying off the home improvement loan, so you don’t overstretch yourself and make it challenging to repay.

Contact your lender as soon as you realize you may miss a payment to discuss your options and work out a better schedule.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Joint loans involve two borrowers assuming the responsibility of repaying a loan. Two applicants can be better than one, even when both of you have poor credit scores.

You can consider taking out a loan with someone else like your spouse or partner if you’ve found it challenging to get approved independently.

Lenders will consider your incomes, assets, and affordability, making you less risky together than you would be alone.

You’ll not only qualify for more significant amounts, but you’ll also get better deals and terms. Read on to find out more about joint loans for bad credit in the UK.

How Joint Loans For Bad Credit Work

Joint loans for bad credit involve incorporating a co-borrower in a loan application if one or both of you has a bad credit history.

Joint loans are different from guarantor loans, where a co-signer takes on shared responsibility but is only liable when you default and doesn’t use the loan’s proceeds.

In joint loans, you’re both equally responsible and liable for the debt obligations from the moment you both sign the loan agreement. Lenders combine your incomes, assets and expenses in the affordability assessment, which improves your chances of getting approved even with bad credit.

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Also, if only one of you has a poor score and the other has a better credit rating, you can get more loan choices and better deals. The co-applicant may have a steady and long employment record or a more stable income, and such factors can help despite their bad credit score.

It’s vital to remember that you’re not responsible for only half or a share of the loan. You both agree to pay off the whole amount in joint loans for bad credit even if the co-borrower can’t or won’t pay.

Features Of Joint Loans For Bad Credit

Higher Loan Limits

Joint loans for bad credit will you qualify for higher loan limits than you’d get by yourself with a poor credit score. This is because there’s more income and collateral to be considered by lenders from you and your co-borrower. When you both join your forces, you’ll be regarded as less risky, enabling lenders to advance higher loan amounts.

Lower Interest Rates

Applying for a joint loan makes it easier to get favourable interest rates from lenders even with bad credit scores. A co-borrower increases your chances of getting lower interest rates because you both share responsibility for the loan. Some lenders also favour low credit scores for co-borrowers than single borrowers, making them open for better terms and rates.

Types Of Joint Loans For Bad Credit

Most lenders specialize in offering two types of joint loans for bad credit. These include:

Secured Joint Loans For Bad Credit

Secured joint loans for bad credit work like traditional secured loans. A single or jointly owned asset is eligible as the loan collateral, such as a joint mortgage. You can borrow a particular amount against the property, and you’ll both be jointly and severally liable for monthly payments over a fixed time frame.

In the worst-case scenario, if you both fail to make repayments, lenders may repossess the asset to claim back the funds. With security, you reduce the risk for the lender and increase your chances for more significant loan amounts and more favourable terms.

Unsecured Joint Loans For Bad Credit

With unsecured joint loans for bad credit, lenders don’t require any asset as collateral for the loan. Even with bad credit scores, you may still get approved depending on your affordability and that of your co-borrower. Lenders will look at both your incomes and monthly expenses when considering your application.

Because the risk is generally higher for the lender, these loans may have higher interest rates than their secured counterparts. The good news is that they have fast payouts, which can come in handy in an emergency.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Uses Of Joint Loans For Bad Credit

Joint loans can help you fulfil a wide range of financial needs, especially if you have bad credit. These include:

Tuition Fees

Taking out a joint loan for bad credit with your partner or spouse is an excellent way to help pay for your children’s tuition fees or advance your education. It makes sense to jointly invest in your children’s education through a joint loan if you don’t have enough savings or don’t want them raking up too much debt with student loans.

Home Improvements

If you’re a couple or partners who are homeowners, taking out a joint loan for renovations and improvements is better than taking out single loans, especially if one or both of you have bad credit scores. Home improvements can be costly, and a joint loan helps you qualify for higher amounts to cover the costs while helping you avoid higher rates.

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Debt Consolidation

If you’re facing lots of debt from personal loans, store cards or credit cards that are messing with your family accounts and making it hard to cover bills, then a joint loan for bad credit can be the solution. You may be able to refinance your debts into one joint loan with your partner to make your family finances more manageable. It also gives you some breathing room, making it easier to put food on the table and keep up with repayments.

Considerations When Taking Out Joint Loans For Bad Credit

The Combined Debt To Income Ratio

Sometimes not all co-applicants are helpful. In cases where your co-applicant has substantial debt and minimal income, your combined debt to income ratio may suffer. In such scenarios, you may have better chances of approval when you apply on your own. There are many personal loan options to consider even with bad credit, but you may have to borrow lower amounts.

Liability

It’s vital to remember that both parties involved remain 100% responsible for the loan repayment through joint liability regardless of what happens between them. You have to ensure everyone understands their obligation because if the other party doesn’t contribute to repaying the owed amount, you could end up repaying a considerable debt alone.

It doesn’t matter who spent the money, the items bought or who now owns them. It also won’t make a difference whether you’re in a civil partnership, marriage, or no relationship exists between you.

It’s wise to clarify the duties of each person towards repayments, ownership details and instructions in case of death or an accident to prevent future complications.

Joint Loans for Bad Credit Conclusion

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

A secured loan or a second charge mortgage against your buy-to-let property can be a practical way for a landlord to consolidate any debts, invest in a new property or free up some cash for renovations.

In this guide, we will explore how a secured loan application works and the most frequently asked questions with regards to taking out a secured loan on a buy to let property.

What is a Second Charge Mortgage?

A second charge mortgage is a type of secure borrowing against the equity owned within a property. Technically when a second charge mortgage is in place there are two separate mortgages secured against one property.

A second charge mortgage can be obtained even if the applicant does not reside in the property, and therefore buy to let properties may be eligible for this type of financial product.

Apply for a Secured Loan Today

Benefits of a Buy to Let Secured Loan

There are a number of benefits of opting for a secured second charge mortgage against a buy to let property as follows:

• Preserving an existing mortgage deal – Should the first mortgage already in place on a property still have favourable terms compared with the current mortgage market, it may be sensible to keep this in place rather than re-mortgaging or refinancing the entire borrowing as it could be more cost-effective. Another circumstance when keeping the current mortgage in situ may be if the applicant’s credit rating has changed and therefore the interest rates offered may be higher.
• Avoiding exit fees – Should there be exit fees liable on the first mortgage if you were to re-mortgage, it may be more financially beneficial to leave the current mortgage in place and choose a second charge mortgage for further borrowing. Before any decisions are made it is worth checking the terms of the current mortgage and seeking specialised financial advice.
• Qualifying eligibility – Often second charge mortgages have differing eligibility criteria to that of a first charge mortgage and therefore they can be easier to be obtained. Should the applicant’s circumstances have changed since the application of the first charge mortgage, it may be worth exploring a second charge mortgage.
• Borrowing levels – Although there are other ways to obtain additional finance such as an unsecured personal loan, the borrowing values are typically capped at £25,000 and therefore should higher levels of finance be needed, a secured loan may be the solution.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.

What can a BTL Second Charge Mortgage be used for?

Commonly, secured buy to let second charge mortgages are used to aid landlord’s expand their property portfolio by utilising the capital in one property to fund deposits or renovations in the next property.

However, the additional finance may be used for a range of other purposes, including consolidating debts as long as the terms from the lender meet the purpose.

Who can apply for a Second Charge Buy to Let Mortgage?

Most property owners can apply for a second charge buy to let mortgage and their application will be reviewed and analysed against the lender’s borrowing criteria and affordability checks.

The main criteria that a lender will be interested in is the level of equity available within the property for the loan to be secured against, and the income of the applicant to cover the repayments.

As we have briefly mentioned, an applicant does not need to live in the property to apply for a second charge mortgage, and in some circumstances, even further borrowing can be made such as a third or fourth mortgage on the same property.

Although on face value, the second charge buy to let mortgages are available for all, it is highly recommended that specialised financial advice is obtained before making an application to ensure that a second charge mortgage is the most cost-effective approach to achieve the objectives and that an application is likely to be accepted.

Read our complete guide on how do secured loans work? 

How much can you borrow on a Second Charge Mortgage?

As with standard mortgages and other borrowing, a lender will tailor an offer depending on the personal circumstances of the applicant. The amount that can be borrowed on a second charge mortgage will depend on:

• The applicant’s income and expenditure – An applicant will need to prove their income level and meet affordability checks
• The applicant’s credit history
• The level of equity available within the property – The equity is the value within a property that is owned outright, for example, the difference between the total property value and any mortgage owed
• The rental income on the property

Typically, lending is capped at 75% loan to value (LTV) of the property value for a buy to let mortgage however there are differences between lenders.

Some lenders may be prepared to offer second charge mortgages on small values as little as £10,000 however should your requirements be needing finance for less than £25,000 it may be worth comparing the terms against a personal unsecured loan.

Whereas there are a handful of mortgage lenders that may even offer 100% of the property’s value with a second charge mortgage depending on the applicant’s personal circumstances.

The total amount that can be offered on a second charge mortgage will likely vary between lenders and therefore expert financial advisers can assist with navigating the market as they have in-depth knowledge of lenders terms and recent borrowing.

Apply for a Secured Loan Today

Buy-to-let secured loan rates

The interest rates on buy-to-let second charge mortgages are typically lower than other forms of finance and for this reason, are a financially wise option for landlords looking for a loan. 

The exact rate you will be able to secure depends on a variety of factors. For example, borrowers with a healthy credit history borrowing an amount regarded as affordable at a low loan-to-value (LTV) will usually be offered at extremely competitive rates as you will be regarded as a low-risk applicant. 

If you have a poor credit history or a high LTV, then the rates offered to you are likely to be high to pay back for the added risk for the lender. 

Still, even those with poor credit can attain a loan from specialist lenders who specialise in receiving applications from individuals with bad credit. Get in touch with us today, for a free no-obligation consultation with one of our expert advisers. 

Our advisers are used to working with customers with poor credit history and can help you navigate the entire UK loan market to find a suitable lender with the most competitive terms for your circumstances.

How to get a second charge mortgage on a BTL

Just like a regular mortgage, you submit an application to a lender via a broker or directly. The next steps involve the lender assessing your application and looking into key details such as affordability, credit history etc.

If you have a poor credit history you may also be interested in reading our guide on instalment loans for bad credit.

Can you use a new lender? 

Yes! Many people assume that you must take a second charge mortgage out with your current mortgage provider, but you don’t. It can be much more advantageous to search the whole market to find a lender offering the most competitive rates, which our expert advisers will be more than happy to help you with.

Other Considerations with Second Charge Mortgages

As with most financial options, there will be various factors involved and considerations to evaluate including:

• Interest rates – Typically, the interests offered on the second charge buy to let mortgages are low in comparison with other lending methods and therefore this type of financial product can be a cost-effective way of raising capital for a number of purposes.
• Permission – The first mortgage lender would need to be contacted as part of the application process in order to grant their permission for a second charge to be added to the property.

Helpful guides: 

• Can I get a secured loan on a buy to let property? 
• Secured business loans.
• Homeowner loans with bad credit.

Can I get a Secured Loan on a Buy to Let Property Summary

Being a landlord comes with many responsibilities and decisions needed and the array of financial products available can appear overwhelming with so many elements to thoroughly research and consider, however, our friendly team of financial advisors are at hand to help at every stage.

Whether you are a relatively new landlord but are ready for your next property, or you have years of experience but need some tailored, specialised advice on financing your property portfolio, please do get in touch.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Further reading:

• £20,000 loans with bad credit.
• Instalment loans for bad credit.
• £10,000 loans for bad credit.

Interest-only mortgages, secured against an asset can be a useful financial solution for a number of circumstances in order to keep the monthly repayments down, however, as with many financial decisions, there is a range of factors to consider.

This article will explore the differences between secured and unsecured loans, the advantages and disadvantages of interest only secured loans, typically how much can be borrowed, the lending criteria and the application process.

What are the Differences between Secured and Unsecured Loans?

Secured Loans

A secured loan is a type of borrowing that, during the application process details of an asset are provided as security to the lender such as property, equipment or land.

The asset acts as collateral for the lender and in turn reduces the risks involved, that in the event of the borrower defaulting on the agreement, the lender could repossess the asset.

Secured loans often have more favourable loan terms than unsecured loans as the lender has some level of protection should the borrower’s circumstances change and can no longer make the repayments.

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Unsecured Loans

Unsecured loans are where an offer to lend is solely based on the personal circumstances of an applicant and therefore the debt is not associated with an asset. Examples of unsecured loans are personal loans, credit cards or bank overdrafts.

Unsecured loans can be useful in certain circumstances however the loan values available are usually capped and therefore are not often used for big projects or purchases.

In addition, the interest rates are usually higher than secured loans, due to the risks to the lender.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.

Advantages and Disadvantages of Interest only Secured Loans

Now that we have distinguished between secured and unsecured types of lending, let’s focus more on the advantages and disadvantages of interest only secured loans.

Firstly, let’s clarify what an interest-only secured loan is. An interest-only secured mortgage is a financial product that enables borrowing however the mortgage holder is only required to pay the interest due to the loan each month, during an agreed term. However, at the end of the mortgage term, the capital amount borrowed remains outstanding.

Advantages of Interest-Only Secured Loans 

• Lower Repayments – Interest-only mortgage repayments are cheaper than those on a standard, repayment mortgage however it is worth bearing in mind that once the mortgage term is concluded, the capital loan is still due and therefore a strategy to repay this will still be required.
• Lower interest compared with unsecured loans – Typically lower interest rates are applicable to secured loans due to the linked asset.
• Longer repayment terms – Usually secured loans offer longer repayment terms than unsecured loans that are often capped at seven years.

Disadvantages of Interest-Only Secured Loans

• Capital remains outstanding – The main downside of interest-only lending is that the capital must be repaid at the end of the mortgage term. Therefore, a repayment strategy must be in place and agreed upon with the lender before taking out the loan.
• Interest-only loans can work out expensive – As the capital is not being reduced during the term of the loan the level of interest charged will not decrease either therefore more interest is paid over the term compared with repayment mortgages.
• Riskier – As a separate exit strategy is required with interest-only mortgages, the repayment vehicle such as investments or pension funds could act in a different way to the plan therefore there may not be enough of a fund to pay off the capital when needed.

Why would you apply for an interest-only secured loan?

Typically an interest-only secured loan is attained by those looking to renovate their home. For example, upgrading an old kitchen, in which circumstance you can release some equity from your property to fund the project rather than waiting to save up enough cash.

Another popular reason for an interest-only secured loan is to consolidate debts, for example, consolidating multiple credit cards and loans into a single monthly repayment. This often allows people with considerable debts to secure a lower interest rate and lower payments over a longer-term, allowing them to regain control over their finances.

Helpful guides: 

• Can I get a secured loan on a buy to let property? 
• Secured business loans.
• Homeowner loans with bad credit.

How much can you borrow? 

As with standard mortgages, the amount that an applicant will be offered will vary depending on the personal circumstances of the applicant, the equity available within the property and the lender’s loan to value criteria.

Minimum equity requirement 

The equity within a property is the difference between the property value and the outstanding mortgage balance. Some lenders will have a minimum equity requirement as eligibility criteria for interest-only mortgages, often of £150,000 for first charge loans.

Loan to value (LTV) criteria 

As well as minimum equity requirements, lenders usually have a loan to value (LTV) criteria too. For instance, if a lender has an LTV of 60% and your property is valued at £100,000 with a balance of £50,000 owed from your first mortgage, the most you can borrow would be £25,000.

The majority of mortgage lenders have a maximum LTV of around 50%, while some can go as high as 90%. Feel free to get in touch to talk to one of our advisers today, who will be able to offer you help and advice.

Can I Switch from a Standard Mortgage to an Interest Only Mortgage?

One way of obtaining an interest-only mortgage is to enquire about switching your financial product with your current lender.

Bear in mind that your lender does not have to agree to switch products and even if they do, the lender may not offer the most competitive rates or terms, however, this could be a short-term solution depending on the circumstances.

Another matter to be aware of is that switching mortgage products may mean that any early redemption penalties or other similar fees are due.

Therefore, depending on the personal circumstances of the applicant, it may be worth seeking expert assistance to explore the wider mortgage market in order to obtain the most competitive mortgage solution.

Interest Only Second Mortgage vs Remortgage?

Instead of a second mortgage, you may have considered remortgaging your property too, so what should you do? 

It’s always worth investigating whether a remortgage maybe your best option, however, there are some scenarios where a second charge mortgage will make more sense. 

If you currently have a fixed or tracker rate on your first mortgage, then it may not be financially advantageous to break the contract and incur penalty fees in order to pursue a remortgage deal.

To determine this, it’s a good idea to compare the fees of breaking your first mortgage contract and the fees associated with securing a second mortgage. 

Regardless if you have a good mortgage deal, you may not want to refinance at this stage. 

Even so, you may be unable to refinance your first mortgage due to other reasons, such as affordability issues, while a loan provider may consider you more suitable. 

Another factor is if you do not wish to change your first mortgage repayment plans e.g. extending the term and may wish to take any further financing out on different repayment terms. 

The reality is that there are many different things to consider. Mortgage advisors are best placed to be able to advise the most cost-effective and appropriate approach in specific circumstances and therefore if you are considering whether to obtain a second mortgage or to re-mortgage, it would be highly recommended to book a consultation with one of our expert mortgage advisers today.

Apply for a Secured Loan Today

Income and affordability

As with all types of finance, lenders will assess your level of income and expenditures and determine if you can afford to make the monthly repayments of a second charge mortgage.

As stated, lenders tend to be more flexible when assessing applications for a second charge mortgage.

Here are the different forms of income that are usually accepted:

• Fixed salary full-time employment income
• Varied/commission-based full-time employment income
• Part-time employment income
• Self-employed income (net profit/dividends)
• Pension income
• Temporary/freelance contract work (value of contract / daily rate)
• Investment income (rent/trust monies)
• Maintenance payments
• Certain government benefit payments

What happens at the end of the interest-only second charge mortgage term?

After you have completed the payments on the interest portion of the loan and have come to the end of the term, the next stage is to repay the original capital amount. 

At the point of agreeing on your original loan, you should have come to an agreed repayment method with your lender. 

These are some of the most common repayment vehicles offered by lenders: 

• ISAs to repay an interest only secured loan
• Lump sum (tax free) from a pension plan 
• Endowment policies to repay the secured loan 
• Sale of the property to repay an interest-only secured loan
• Sale of another property owned by yourself to repay an interest only secured loan
• Family inheritance or trust fund to repay an interest only secured loan

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Interest only secured loans and bad credit

There’s no denying that poor credit history can impact your eligibility when applying for a loan, however, it depends on when the issue occurred and the type of issue.

If you have a poor credit history you may also be interested in reading our guide on instalment loans for bad credit.

Regardless, even if you have poor credit, it may be possible to borrow money from a specialist lender that accepts applications from individuals with poor credit.

There are loan providers that do offer loans to individuals in the following scenarios:

• Late payments
• Defaults
• CCJs
• Mortgage arrears
• Debt management plans
• With IVAs
• After a Bankruptcy
• After a Repossession

If any of the above apply to you, the first thing to do is to acquire a current credit report to see exactly what it records. Once you have a copy, you can call one of our advisers who would be happy to discuss your options and help you progress in your application.

Read our complete guide on how do secured loans work? 

Interest-Only Secured Loans Summary

As with any big financial decision, research and consideration of all of the factors concerned are needed, including a comparison of costs between various options.

Our specialised team of mortgage experts can provide guidance no matter what stage of the landlord journey you are at – either just starting out, or if you have plenty of rental experience however due to a change of circumstances, you require a tweak to your financial matters. Please get in touch to book a friendly, no-obligation consultation.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Further reading:

• £20,000 loans with bad credit.
• Instalment loans for bad credit.
• £10,000 loans for bad credit.

Being self-employed can bring many benefits such as independence, flexibility, a self-designed career path in an industry of choice or where the passion lies, which is often what people dream of as per the famous saying ‘choose a job you love and you will never work a day in your life!

However, being self-employed can also carry negative connotations such as the perception of inconsistent income, and therefore obtaining a loan when self-employed can bring additional hurdles, especially should a self-employed person not have accounted for many years or at all.

Lenders, especially those found on the high street often deem self-employed applicants as higher risk and therefore obtaining loans can be trickier.

Often even if loan offers are achieved, the terms are usually not as favourable as an employed applicant may be offered.

However, over recent years the financial market has been diversifying and is also more understanding that each case is unique, with every borrower having different requirements and backgrounds.

Therefore, should you be looking for a self-employed loan for a range of purposes such as investing in extra equipment or expanding your business, it would be worth exploring the market to find the best interest rate and terms available.

In this guide, we will examine the financial options that self-employed people may have when looking to borrow money for their business.

What are self-employed loans?

A loan for a self-employed person is a method of borrowing money for a range of purposes. The loan can either be secured against an asset such as property, or unsecured, based solely on the credit history of the person and associated business.

Typically, secured loans will be offered with lower interest rates due to the decreased risk to the lender, as an asset is linked to the loan as collateral.

Secure self-employed loans are typically used to fund business developments whereas personal loans are usually only available for personal uses.

Repayment periods can vary depending on a range of factors as set by the lender and type of financial product, however, they can be either short term loans, between 1-5 years duration, or over much longer periods of up to 30 years, suitable for larger projects or investments.

Apply for a Secured Loan Today

How do self-employed loans work? 

Loans for the self-employed are available as unsecured or secured payments. A secured loan means that you guarantee the loan repayments with your assets e.g. property, while unsecured loans do not involve your assets.

An unsecured loan is typically more costly due to higher interest rates.

A self-employed loan can be a long or short term solution, it all depends on the amount you want to borrow and your credit rating.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Short term loans can aid cash flow for example, whereas the longer-term loans would be useful to spread the cost of more costly business purchases.

As with any borrowing, the offer of a loan will be based on criteria set by the lender which could include a review of personal credit history as well as how long the business has been established and trading.

One consideration with any borrowing includes the consequences should the situation arise where repayments cannot meet. In which case, the business or linked asset (if secured) could be at risk from legal action and ultimately possession by the lender.

As already briefly mentioned, typically a high street lender would not usually offer competitive secured homeowner loans to self-employed people, however when they do, the interest rates may not be the most competitive, therefore specialised lenders are often approached to explore the wider market for the best offers.

Applying for a self-employed loan

The application process for borrowing money is often similar no matter the type of financial product and purpose. Typically, the process will initially require gathering the relevant information to be submitted and reviewed by the potential lender.

What do I need to apply for a self-employed loan?

• Proof of an applicant’s full name and personal address details covering the past 3 years
• Company information including the type of industry it operates within and legal entity status
• Company tax returns (SA302)
• Business bank statements
• Evidence of any income sources, such as rental income for landlords

As with any borrowing, it is highly recommended that plenty of research is undertaken before making an application and committing to a financial product, and therefore by approaching a broker, all options can be extensively explored to find the most suitable product for the applicant’s needs, along with the best terms.

Apply for a Secured Loan Today

Lending Criteria for Self-employed loans

Each lender will have its own loan eligibility criteria for approving self-employed loans. Typically, this will include:

• The credit score of the applicant
• The creditworthiness of the business
• Income and affordability – Proof of the businesses’ income sources and typical monthly expenses will be required
• Security- The amount of property equity or the total value of other assets put forward as colleterial for a secured loan

Frequently asked questions about self-employed loans

Here are some of the most common questions received about self-employed loans:

How much can you borrow?

Mortgageable can help you access loans from between £3,000 to £600,000.

What are the repayment terms? 

This can vary but you may be able to choose from 1 all the way up to 30 years.

Read our complete guide on how do secured loans work? 

Can a self-employed person obtain a secured loan without proof of income?

Typically, as part of the application process, proof of income is required, however, if you are newly self-employed, or do not have accounting records covering a sufficient period to prove income, there are other methods that lenders can use to review an application.

Lenders will usually prioritise reviewing the overall credit score of an applicant during the underwriting process, and therefore as long as the applicants’ credit score is sufficient, there will often be options of borrowing even if proof of income is not available.

However, there will be fewer lenders willing to offer loans to applicants relying solely on a credit score and therefore it is likely that higher interest rates will be applicable on any loan offers.

Secured loans without proof of income again will be less commonly available, however providing an asset as security, reduces the risk to the lender and therefore will likely provide more favourable loan terms.

Apply for a Secured Loan Today

Secured loans for self employed summary

Lenders these days appreciate that every applicant is unique however, by using a broker an applicant can benefit from receiving inside market knowledge that can be very helpful, including the success rates of similar cases.

As with any financial decision, it is highly recommended that independent financial advice is sought before committing, to ensure that all terms are fully understood.

Independent brokers will also have access to the whole of the market, rather than just high street lenders which will often reveal a range of options and competitive prices.

However, remember that all secured loans will have consequences to owned assets if the repayments are not kept up.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Further reading:

• £20,000 loans with bad credit.
• Instalment loans for bad credit.
• £10,000 loans for bad credit.

By accessing a business loan, additional finances can be obtained to enable a business owner to expand their business operations or secure an asset.

Business owners will find a range of financial products available on the market, however, the value and terms available will likely depend on the circumstances of the loan applicant as well as the linked asset.

In this guide, we will explore secured business loans in further detail including reviewing the benefits of obtaining secured finance as well as looking at the application process.

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What is a secured business loan?

A secured business loan is the method of borrowing capital finance by providing details of an asset to be used as security to the lender.

Should a business owner have a commercial asset to secure lending against such as a tangible asset like property, machinery, vehicles, equipment, land or commercial or personal assets, they may be able to access a high-value business loan of up to £2 million.

The asset provides security and in turn, reduces the risk to the lender, therefore depending on the value of the asset, can enable more favourable loan terms.

However, business owners should be aware that should an unforeseen event take place which impacts the ability of a business owner to keep up the loan repayments, there will likely be repossession consequences of the asset linked to the loan.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.

Benefits of secured business loans

The process of securing a loan against an owned asset will often provide a number of advantages to the business borrower such as:

• Enabling larger loan values – As discussed, by securing the borrowing against an asset, the lender reduces their risk and therefore may be willing to lend higher values.
• Offering longer repayment terms – Typically, secured lending will enable longer loan terms, which can reduce the value of monthly loan repayments and enable business owners to budget over a longer period of time, sometimes up to ten years.
• Lower interest rates – Secured loans typically have lower interest rates applicable versus unsecured loans, and therefore can keep the value of monthly loan repayments lower. Commonly, the interest payable on a secured business loan is fixed throughout the duration of the loan, which can aid the cash flow of a business as the flat repayments are known as consistent.
• Enabling even business owners with bad credit records – Secured loans can even be suitable for business owners with a poor credit history.

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If you have a poor credit history you may also be interested in reading our guide on instalment loans for bad credit.

How do secured business loans in the UK work?

As with any financial product application, there will be an application process, followed by the proposed lender analysing the application. The process of applying for a secured business loan can be similar to applying for a mortgage and therefore documents will need to be made available to confirm identity and business income.

Before making a secured business loan application, in addition to finding copies of the necessary documents, a business owner should consider the following elements:

• Deciding which asset to commit to the secured lending.
• Select an ideal total amount to borrow.
• Choose a loan term.

As already discussed, an application for a secured business loan will be linked to an asset and therefore during the application process, a valuation of the said asset will need to take place.

Once these initial critical elements have been decided, the market can be researched to find a suitable lender and financial product, at the most favourable terms.

The loan value offered, and terms will vary depending on the circumstances of the business owner, the business and the asset offered as collateral. However, as a rough guide, it is common for lenders to offer a loan for up to 100% of the asset value secured to the lending.

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How much can I get? 

The amount you can borrow will depend entirely on the value of the asset you put down, but the majority of lenders will offer 100% of the value of the asset. For example, if your property is worth £200,000, you will usually be able to acquire a secured business loan of £200,000.

Helpful guides: 

• Can I get a secured loan on a buy to let property? 
• Secured business loans.
• Homeowner loans with bad credit.

Will my business qualify for a secured business loan?

Typically, the criteria to obtain a business loan is as follows:

• Be a UK registered business either as; a limited company, a limited liability partnership or as a sole trader.
• Be based within the UK.
• The business must have been trading for a least three months before the application is made.

If the business owner applicant operates as a limited company or limited liability partnership, they may be required to supply a personal guarantee as well as the asset for security. In addition, some lenders may also require a fully detailed business plan as part of the application process.

It is highly recommended that a business owner approaches a financial broker to assist with the application process for a business loan, as well as exploring the market to find the most suited financial product, at the most favourable rates.

What types of collateral can be used to secure against the loan?

The majority of lenders will consider a range of different tangible and intangible business assets to secure the loan against. Some of the most commonly used assets include the following:

• Personal assets
• Commercial assets
• Vehicles and machinery

Certain lenders will also accept a pool of different assets, for example, a property, a vehicle and a business to put down for a secured business loan.

Read our complete guide on how do secured loans work? 

Can I obtain a secured business loan against my house?

Should an existing mortgage be in place on an asset that a business would like to use as collateral against a new business loan, it is still possible to proceed. In such circumstances, the lender may register a legal or equitable charge on the asset. The differences between these two charges are a follow:

• Legal Charge – This type of charge grants the lender the legal power of sale of the linked asset should the loan repayments not be maintained. It is worth noting that consent may be required from any existing lenders against the asset, such as a mortgage provider and therefore there can be some delay in the process for the lender to recoup funds.

• Equitable Charge – It is commonplace for business loan lenders to opt to register an equitable charge against an asset as security as part of the loan process.

An equitable charge does not provide a lender with the power of sale over an asset, however, should there be repayment issues, the lender can seek approval for the charge to be granted and then the funds can be released very promptly, sometimes in a matter of hours.

Although an equitable charge does not provide a power to force the sale of the asset, it also does not require consent from any other lenders involved and therefore can be a much quicker process.

Are my assets at risk?

Yes. The asset you use to secure the loan may be lost if you fail to meet the repayment terms outlined in your lender’s contract. The lender will then typically sell the asset to reclaim the remaining debt.

What if I don’t have any business assets?

If you don’t own any assets or lack what’s required for a secured business loan, you can explore alternatives such as an unsecured business loan.

Secured Business Loans Summary

Secured business lending can open up an array of opportunities to business owners, whilst providing a fixed cost repayment plan. As we have discussed, this type of funding is secured against an asset and therefore this would be subject to repossession should the loan repayments not be maintained.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Further reading:

• £20,000 loans with bad credit.
• Instalment loans for bad credit.
• £10,000 loans for bad credit.