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Secured Personal Loan
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Finding the best Low Rate Personal Loan OR Low Rate Secured Loan for your circumstances is not easy at the best of times. Banks, building societies and other financial institutions have a broad range of products, pricing and lending criteria, and knowing which one to choose, and more importantly, which one will approve your application, can be complicated. OnlyFinance can help you find the best loan for you.
We searches over 550 different loan products. Use our Secured Loan Search Tool to get a Lowest FREE quotation. Once you have found the best product, you can apply for that loan.
Types of loan
Loans are typically offered for a variable term at a fixed rate of interest, and are used mainly for home improvements, car purchases, holidays & debt consolidation (£5,000 - £25,000). Unsecured personal loans generally have the best rates, but also have the narrowest lending criteria, so that only a minority of those who apply are approved, or receive the rate they applied for.
Secured personal loans are very similar to unsecured loans, but because the loan is secured against your property, you can often borrow greater amounts of money, up to £100,000 in some cases. As such, secured loans are very popular for debt consolidation. But they are also the best type of loans for homeowners who have been refused credit in the past, because additional security in the form of the property has been provided as part of the agreement.
A specialist type of secured loan exists for car purchases where the individual has a poor credit history. With a secured car loan, the car replaces the individual’s home as security against the loan.
Lending criteria
Banks look at a range of criteria before approving a loan, such as age, income, existing financial commitments, home status, credit history as well as postcode and purpose of loan.
Each Bank or financial institution decides its own lending criteria, and in the vast majority of cases it will use your credit score. If your Credit Score exceeds the target, then you will be approved; if not, then the application will be declined.
Because most financial institutions register a ‘search’ every time they access a credit reference agency / bureau for your credit history, a declined application may hinder your chances of securing credit elsewhere. Some banks take the view that if one bank refused you credit, they will do the same. So taking the time to apply for the best personal loan OR best secured loan for your individual circumstances not only saves you time in the long run, it also protects your credit history.
Refused credit?
Refused credit is a lot more widespread than many people believe, and that’s often because of the stigma attached to it. No-one wants to admit to having been refused credit.
The reality is that Banks and financial institutions typically decline more than half the applications they receive. Following advertising regulation changes imposed by the Office of Fair Trading in recent years, banks must promote their typical rate, which is the rate that most of their customers receive. In the past they may have been able to approve an application at higher rate, but now some banks with the best rates would rather decline it in order to preserve their typical rate.
Fortunately, there are a number of financial institutions which cater for customers who have been refused credit, and they offer secured loans to homeowners at rates very close to those offered by the more familiar high-street names.
Furthermore, there are specialist car loans offered by other financial institutions which cater for customers looking to buy a car who have been refused credit.
Often the rate offered by these financial institutions will reflect the extent of your credit history, so the odd discrepancy should get the best rate available, whereas several months of mortgage arrears or County Court Judgements (CCJs) will attract a less favourable rate to balance the additional risk for the lender. That said, many customers are often surprised at how favourable some of the rates can be given their past credit history.
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