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Secured Loans

Secured loan is any loan (including mortgage) which is secured on a property. The mortgage always has priority to any other secured loan - it has the first charge. This means that if the borrower fails to pay the loan and the property is repossessed the mortgage lender will be paid off first.


Under the title secured loans it is usually understood loans other than the mortgage, secured on the same property – second charge. As the name implies the second charge lenders are paid off after the first charge in case of repossession. This makes them more risky and therefore are usually more expensive and often more difficult to take. In any case though they are cheaper than unsecured loans and are worth considering.


Secured loan is usually taken if the fixed/discounted period of the mortgage has more time to run and a remortgage would be costly due to the early repayment charges on the mortgage.

The process of getting a secured loan is very similar to the mortgage process and generally the requirements are the same. It involves loan application form (similar to mortgage application), ID, address and income verification and property assessment (paid for by the applicant). Once all the elements are in place the loan offer is issued and completion usually follows quickly as there is no solicitor involved in the process.


There is though an extra stage in the process. The secured loan lender (second charge) will usually ask the mortgage lender (first charge) for consent to the loan and if refused the loan can not be granted.