A secured loan is a secondary mortgage, when a second charge lender takes a legal charge over the property, which is added behind your mortgage lenders first legal charge.





This will be riskier than a first charge as the lender will be second in the queue if the house is repossessed – if there is nothing left then they wouldn't get anything back.

Because of this higher risk rates are typically much higher than a standard mortgage but there are some instances when they may be a suitable option.

Secured loans can be set up quickly, usually within a few weeks. Therefore, if the money is required quickly a secured loan can be a great option to consider.

If you are struggling to demonstrate the required income for a first charge lender a second charge may be appropriate. Mortgage lenders will require two year's income for a self-employed applicant, but second charge lenders will typically be more flexible and could use one year's income, or even use business turnover.

Secured loans may be available for a higher loan to value than your current mortgage lender is able to offer and also may be more willing to accept adverse credit issues.

Secured loans have a part to play but shouldn't be the first port of call for additional borrowing.