The main reason why people choose secured lending is to save money which we all want to do!
A second charge loan is likely to offer better rates of interest as the loan is secured on your property. Unsecured loans from high street banks and other sources can be notoriously expensive, we have all seen the rates charged by the so called “pay day” lenders.
The reason for a secured loan being more cost effective is due to the lender having to assess the risk. If you are a high-risk borrower they will need to offset the risk with higher interest rates. So, if you offer security, then the risk involved is much lower and the lender will offer far better rates.
This is indeed particularly useful for those special groups such as the self-employed, retired or those who have had past credit problems.
There are many reasons a second charge loan may be preferable over a re-mortgage but there are three key very common factors.
1} Your credit history has deteriorated since you took out your mortgage.
2} You currently have a mortgage with penalties to change.
3} Speed of completion.
Need some assistance?
If you think this type of loan could assist you in your future planning it is very important to ensure you get the right one to suit you. There are many different lenders offering numerous second charge loans so please do call one of our advisers.