When searching for a loan, you may notice that low rates are much more widely available on secured loans than on unsecured loans. The interest rates advertised on a secured loan are relatively low due to the lowered risk to the lender; providing collateral for a secured loan gives the lender leverage in the event that you fail to complete on your loan repayments, by forcing the sale of your home in order to settle debt. This makes secured loans a good option to keep your interest rate as low as possible, but it also means that you are risking your home in order to do so.
The alternative to a secured loan is an unsecured loan. Although unsecured loans may be advertised at low rates, actually being offered this low rate by the lender is highly unlikely unless you have a perfect credit rating. As there is no guarantee of recovering their money for the lender as with secured loans, unsecured loans are more dependent on your personal history of borrowing; and if your credit rating is less than perfect you may not qualify for the most attractive rates. As a result, if you have a low credit rating, a secured loan may be your best chance to qualify for a low rate.
To compare secured loans available at low rates from UK lenders, complete the form on this page. Totally Money will source the best low rate secured loan products available for your budget and requirements and put you in contact with a secured loan expert for independent, obligation free advice regarding your best low rate loan options.