Applying for a Secured Loan

When applying for a secured loan it is important to remember you are securing the loan against your property. If you find yourself in difficulty and are unable to make repayments you must contact the lender immediately or you may be putting your home at risk.

Because secured loans are secured against your property, the lender will need to be satisfied that the value of your house is correct and sufficient to be able to cover the loan should you fall into serious difficulty. This is done through a survey of your property, much the same as you would conduct a survey on a property you are considering buying.

The future potential value of your property is also taken into consideration which is why some companies will allow you to borrow up to 125% of the value of your home.

Also, when applying for a secured loan you will need to be able to verify your ability to make the required repayments. This is usually done by showing your last 3 months bank statements or if you are self employed a copy of your accounts. A call or a letter may be sent to your employer requesting verification of your job details.

Some lenders require less information than others to make a decision on a loan depending on a customers credit worthiness and how much they wish to borrow.

There are also potential fees associated with secured loans and in some cases the applicant may be required to cover the cost of any valuation and also pay a 'broker fee' depending on the broker or company used when taking out a loan.

It is highly likely that during the course of your application you will need to speak with the lending company or broker to make you fully aware of what is going on and so that you understand the terms and conditions of the loan.

This is a good thing because it may be possible to judge if you are in good hands by talking to a representative of the company concerned.