If you are a homeowner with debt or a large purchase to consider, one of these loans could be for you. Note that while it is possible to take out a secured loan on a property you are renting out, it is not possible to apply for a secured loan if you are not the sole owner of the property you would like to use as security.
There are of course some more eligibility criteria, which will differ between providers; you will most likely have to have been a UK resident for some years, and have a stable address and income so the lender knows you’re a good bet. However, unlike with unsecured loans, a poor credit rating does not necessarily disqualify you from a homeowner loan.
Why secured loans are more amenable to those who don’t exactly have a perfect credit score goes back to the main difference between secured and unsecured loans. Because you put up an asset as collateral against the loan, it is easier for loan providers to take the (lesser) risk. Instead, you take on the majority of the risk, as you could lose your home if you are unable to repay the loan.
Someone with bad credit may not be able to get the best secured loan, or indeed the rate as it is advertised, but if your only option is to borrow money, then a secured loan could be a better option than an unsecured one. For one, loan brokers such as our comparison partner tend not to start with a credit check, which means you can inquire about secured loans without immediately risking your credit score being damaged further. And, as stated above, you should be able to get a lower interest rate on a secured homeowner loan.