SECURED LOANS
Like a remortgage, a secured loan uses your house as security to allow you to borrow money for any purpose, such as home improvements, a new car, a child’s wedding or a luxury holiday. Very often, a secured loan will be used for debt consolidation.

You can take out a secured loan even if your property is already mortgaged. If this is the case, the lender will take what is known as a ‘second charge’ on your property . If you own your house outright, the lender will take a ‘first charge’ on your property.

Lenders are normally prepared to offer secured loans of between £3,000 and £50,000, although some may offer loans up to £100,000. Like a mortgage or remortgage, you make monthly repayments over a set period of time (typically between 3 and 35 years) which will include an interest charge element. If you fail to repay your loan, or ‘default’, your home could be repossessed by the lender.

UNSECURED LOANS
With an unsecured loan, you do not need to provide any security in order to borrow the money. The lender will simply take into account your employment and credit status to assess the risk.

Typically a loan, whether secured or unsecured, will have a higher rate of interest than a remortgage.