Secured Loans UK: A Simple Guide for Homeowners and Borrowers

If you're considering borrowing a large amount of money and own your home, a secured loan could be a suitable option. But what exactly is a secured loan, how does it work in the UK, and is it the right choice for your financial needs?

At Friends Capital Ltd, we specialise in helping clients across the UK find the most suitable secured loan products for their circumstances. Whether you need to consolidate debt, fund home improvements, or manage a major life expense, our advisers are here to guide you through every step.

What Is a Secured Loan?

A secured loan is a type of loan that is backed by an asset — typically your home. This means the lender has the legal right to repossess your property if you fail to repay the loan.

Because the loan is secured against your property, lenders are generally willing to offer:

  • Larger loan amounts (from £10,000 up to £500,000 or more)
  • Longer repayment terms (typically 3 to 30 years)
  • Lower interest rates compared to unsecured personal loans

How Do Secured Loans Work in the UK?

In the UK, secured loans are often referred to as second charge mortgages, as they sit behind your existing mortgage. You continue to make your usual mortgage repayments, while also repaying the secured loan separately.

Common reasons for taking out a secured loan include:

  • Home improvements or renovations
  • Debt consolidation
  • Funding education or medical expenses
  • Business investment
  • Paying off tax liabilities or legal settlements

Secured loans are available to homeowners who have built up equity in their property. The more equity you have, the more you may be able to borrow.

Secured Loan vs Remortgage: What’s the Difference?

Both secured loans and remortgaging involve borrowing against your home, but they work differently.

  • Remortgaging replaces your current mortgage with a new one, potentially borrowing more in the process.
  • Secured loans sit alongside your existing mortgage, meaning you don’t have to change your current mortgage deal.

A secured loan may be more suitable if:

  • You’re tied into a fixed mortgage rate with early repayment charges
  • Your current mortgage has a favourable interest rate you don’t want to lose
  • You have a poor credit history and wouldn’t qualify for a good remortgage deal

Who Can Get a Secured Loan in the UK?

To be eligible for a secured loan, you typically need to:

  • Be a homeowner in the UK
  • Have sufficient equity in your property
  • Demonstrate affordability through your income and outgoings
  • Pass a credit and affordability assessment

Even if you’ve had credit issues in the past, you may still be eligible, as lenders take the security of your home into account.

What Are the Risks of Secured Loans?

As with any financial product, secured loans come with risks:

  • Risk to your home: If you fail to keep up with repayments, your home may be repossessed.
  • Longer repayment period: While monthly payments can be lower, you may pay more interest over the loan term.
  • Fees and charges: Arrangement fees, broker fees, and early repayment charges may apply.

That’s why it’s vital to seek advice from a qualified mortgage and loan adviser before proceeding.

Most Searched Questions About Secured Loans in the UK

What is a secured loan in the UK?

A secured loan is a loan that is secured against your property. It allows you to borrow larger amounts, usually at lower interest rates.

Can I get a secured loan with bad credit?

Yes, many lenders in the UK offer secured loans to borrowers with adverse credit, as the property provides security for the loan.

How much can I borrow with a secured loan?

Loan amounts typically range from £10,000 to £500,000, depending on your income, credit history, and available equity.

Are secured loans cheaper than unsecured loans?

Generally, yes. Because they are less risky for the lender, interest rates on secured loans are often lower than those on unsecured loans.

How long does it take to get a secured loan?

It usually takes between 2 to 4 weeks from application to completion, depending on the lender and your personal circumstances.

Speak to a Secured Loan Expert Today

A secured loan can be a flexible, powerful borrowing option — but it's not the right solution for everyone. At Friends Capital Ltd, our expert advisers will take time to understand your situation and guide you towards the most suitable product for your needs.

Whether you're looking to consolidate debts, improve your home, or release equity, we’ll explain your options clearly and help you make an informed decision.

Get in touch with our mortgage and loan experts today to find out whether a secured loan is the right fit for you — and how to move forward with confidence.