Secured Loans

What Is a Secured Loan?

A mortgage provider will lend money against the value of your property, and will secure that lending by way of a charge registered against your property – a first charge.

There may be occasions when a homeowner needs to raise additional finance and, in such a circumstance, it may be appropriate to consider borrowing from an alternative lender by way of a secured loan which will also be recorded against your property as a second charge mortgage.

What can Secured Loans be used for?

Secured loans can be used for most legal purposes and are ideal if you are looking to make home improvements, consolidate existing debts or make that special purchase.

Why take out a Secured loan?

Your existing mortgage may be on a low interest rate, be on an interest only basis or in a fixed rate period.

If you were to remortgage in order raise additional finance, you could lose that low rate or interest only facility, in which case your repayments could rise. If you are in a fixed rate period you may incur penalty charges if you repay your existing mortgage within that fixed rate period.

Taking a secured loan would protect your low mortgage rate or interest only facility and avoid early repayment penalties without affecting your existing mortgage.

Secured loans might also be suitable alternatives to unsecured loans, which tend to be for relatively small amounts and over relatively short periods. Secured loans, however, can be for amounts up to £2.5million and over periods of up to 35 years, subject to meeting lender criteria. They allow for those larger requirements and for longer repayment periods, so spreading the cost to reduce monthly repayments. And they come with 2, 3 and 5-year fixed rate options, if required, in addition to standard variable rates.

Gallery Finance offer secured loans from a panel of lenders.