Explaining secured loans and collateral
What do Secured Loans use as Collateral?
Secured loans are a type of loan that uses collateral. This means your loan is backed by financial assets like your home or, in some cases, your vehicle or other valuable possessions. If you are unable to make your agreed repayments your home could be repossessed.
Secured Loans and Collateral Explained
A secured loan means that you are borrowing against an asset, usually your home. Other names for secured loans include homeowner loans and second charge mortgage loans.
Using collateral as security can reduce the risk of borrowing for lenders, secured loans are often used to borrow larger amounts of money. At Evolution Money, our secured homeowner loan customers can borrow any amount ranging from £5,000 to £50,000.
It’s important to be aware that if you agree to a secured loan and using your property as collateral, your lender has the right to repossess your home if you are unable to keep up with your repayments. The lender is then able to sell the property to regain the money owed to them.
Some advantages of choosing a secured loan are that with the added security of backing up your loan application with your property, you are likely to receive a more competitive rate of interest. You’re also able to benefit from more manageable repayments and a flexible loan term, at Evolution Money we allow our customers up to 20 years to repay their secured loan.
Do unsecured loans use collateral?
In general, unsecured loans, otherwise known as personal loans, do not require collateral to back your application. You simply borrow the money from a lender and repay the amount in full through regular agreed payments.
However, some lenders may accept other forms of collateral other than your home as a form of security. These may include your vehicle, jewellery items and other valuable assets. Security may also be assured through a guarantor who will agree to repay the loan if you are unable to.
What to do if you are struggling to keep up with your repayments
If you are struggling to keep up with your secured loan repayments and do not / or fail to pay the agreed amount on time and in full, then you may be at risk of losing your home.
If you are experiencing a change in circumstances and are concerned you may not be able to make your repayments, then you must contact your lender as soon as possible. They may be able to work with you to come to an agreement.
There’s also free support, advice and practical financial help available for those struggling to repay loans and manage their debt. Visit Money Advice Service for free, impartial advice or contact the following national debt charities and non-profit organisations:
- Citizens Advice for help with debt and money
- National Debtline for debt solutions
- StepChange for debt management plans
Applying for a Secured Loan with Evolution Money
Whether you’re planning to renovate your home, finance a new car or pay for your wedding day, our secured loans at Evolution Money can help you to achieve your financial goals.
Apply for a secured loan today and receive a loan amount between £5,000 and £50,000 to suit you!
Our flexible lending terms of up to 20 years, means you can choose a secured loan agreement to suit you and pay it off through manageable regular repayments.
Even if you’ve been refused a loan in the past and possess a less than perfect credit score, you may still be able to accept your secured loan application. We pride ourselves on our personal service and look at much more than the figures on our computer screen when assessing your situation.
To apply for a secured loan from Evolution Money, you must be aged over 18, own your home, live in the UK and be currently employed. We’ll also carry out an independent affordability check to make sure you’re able to manage your expected monthly repayments through your regular income.
Use our online secured loans calculator for an estimate of how much you may be looking to repay each month. Just enter how much money you’d like to borrow with a secured loan and for how long.
To find out more about applying for a secured loan, call our qualified loan advisors on 0161 814 9158 to discuss your borrowing options and our use of collateral.
You can also check out our easy-to-use online application process, and apply for a secured loan in minutes! A member of our team will soon be back in touch to provide you with a no-obligation quote that won’t affect your credit score!
For a typical loan of £30,000.00 over 120 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £598.34.
Including a Product Fee of £2,400.00 (8% of the loan amount) and a Lending Fee of £807.00, the total amount repayable is £71,800.20.
Annual Interest Rates ranging from 11.88% to 29.38% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
