When Secured Loans/ Homeowner Loans Are Often Better Than Unsecured Loans.

It has been announced that unsecured loans are at their most expensive since 2001 which may come as a surprise to many.

Why this is surprising news is that in 2001 the Bank Of England Base lending Rate was 6% and now, as everyone knows, it is at an all time low of 0.05%.

Unsecured loans therefore should be, if anything, less expensive than they were nine years ago but this is however not the case.

One of the main reasons why this is the case is that unsecured loan are exactly that, that is unsecured. require no form of security and as such the grantors of these loans can find themselves faced with a serious arrears situation when the borrowers are in a financial situation where they find it difficult if not impossinble to make their loan repayments every month.

This has happened a lot over the past three years as many people have seen their firms close down at the cost of their job.

The underwriting criteria is strict as regards unsecured loan in addition to the fact that interest rates are now higher than at the start of the decade. to have any hope of being granted this product.

Homeowners are eligible to apply for a secured homeowner loan which are obiously secured products for which only homeowners are eligible.

As a secured loan is naturally secured on a solid asset, the secured loan lender is more certain that his loan will be paid back, and as such a secured loan is more readily obtainable than an unsecured one.

When applying for an unsecured loan the applicant must produce proof of what he requires the loan for, and it is not simply a question of filling in the purpose of the loan on an application form.

If a an unsecured loan is to pay for home improvements for example the lender will require proof that this really is the purpose of the loan in the form of several estimates.

If a homeowner applies for a secured loan, it is only a matter of writing the reason for the loan on the application.

Another advantage with the secured loan is that repayments can be spread from five years to twenty five years making the repayments comfortably affordable to most, compared to unsecurd loans with maximum repayment periods of nomally three years and sometimes five years.

Secured loans have less strict underwriting than unsecured loans.

Remortgages have all the same advantages as secured loans making a remortgage another suitable alternative when a homeowner wants to borrow a flexible financial product at a good rate of interest.

Remortgages start with an interest rate of 1.98% and can be repaid up to twenty five years and with some lenders such as the Halifax uo to forty years.

Therefore when a homeowner wants to borrow, a remortgage or a secured loan are often the best choices.


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Champion Finance arrange secured loans and whole of the market mortgages and remortgages.Debt advice, debt help, debt consolidation and all debt solutions are arranged. Being established since 1985, Champion Finance are experts in their field.