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Secured or Second Charge Loans

A secured loan (or second mortgage) is a way of borrowing using a property (often a home) as security. Around 20 lenders offer secured loans in the UK & are often referred to as “specialist lenders”. They are able to offer flexible underwriting terms & can usually help those who have been turned down elsewhere.

Your home is at risk if you fail to make repayments on a loan secured on it.

Types & features

There are various types of secured loans available. For example:

  • Capital repayment  –  each repayment pays backs some of the capital (amount borrowed) and interest. Providing all repayments are made on time the loan will be settled in full at the end of the term.
  • Interest only – repayments are interest only. Providing all are made on time the balance at the end will be the same as it was at the start. Customers need an “exit route” (a source of money that will settle the loan in full).
  • Fixed rates – the interest rate charged is fixed for a number of years. When the fixed rate ends the customer pays the lenders standard variable rate.
  • Variable rates – the interest rate charged can vary up or down.
  • Tracker rates – the interest rate charged is set at a margin above the Bank of England’s base rate. For example if the base rate was 0.5% and the margin 3.5% the customer would pay 4%.

Why apply for a secured loan?

There are various reasons why clients may find a secured loan more attractive. The most common reason clients may want a secured loan to raise finance is if it provides a better alternative to remortgaging i.e. their mortgage has high early repayment charges or they are on a really good rate and don’t want to lose it.

Also lenders in this sector tend to be more flexible and many are prepared to consider non-standard applications such as complex income, adverse credit, older ages & unusual loan purposes. This is because, unlike unsecured loans, there is an asset being used as security.

What can I use the loan for ?

They are available for virtually all legal purposes. Home improvements, tax bills, new car to name a few.

How to apply

In order to qualify for a secured loan you need to be a homeowner over the age of 18 and to access the best products you will need a good credit history. You can apply via your adviser / broker or directly to Promise. Most secured loans are sold on an “advised” basis meaning customers receive advice on the suitability of the loan offered. Our process is:

  1. Adviser gathers in the customer’s requirements and circumstances by carrying out a “fact find”. This paints a detailed picture of what is required.
  2. We find a suitable loan from our panel of lenders offering over 500 products.
  3. We communicate this by phone and issue a “suitability report” in writing detailing why we regard the loan as suitable and how it meets the customer’s aims and objectives.
  4. Customers complete the application forms and send to us with the supporting evidence needed. On average it takes between 4 and 6 weeks for completion.

Why choose us?

  • Loans from £5,000 to £2.5 million
  • Terms from 1-25 years
  • Largest lender panel in the UK
  • 30 years experience dealing with second charges

Speak to an Adviser today – 01902 585020.