Secured Loans: Common Profiles

A Secured Loan is normally:

  • structured over a longer period of time (5 – 30 years).
  • linked to the amount of equity in a customer's house (although not always).

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Fees

Lenders usually charge fees for providing a secured loan and these will be disclosed to the customer before signing any agreement, and it is usual to have a fee at the start of the agreement and a valuation fee to estimate the value of the property. These fees are usually added to the loan or are paid up front by the customer.

Regular Payments

The customer agrees to make regular payments to the lender until the total amount owed has been repaid over the term of the agreement.

There are no mileage or use restrictions on the vehicle that has been purchased using the loan as the customer is the legal owner.

Payments are based on a variable rate of interest (some lenders will structure a loan that has interim periods at a fixed rate). The rate of interest may well be linked to the Bank of England Base Rate.

The minimum and maximum payments to be made by the customer are set by the individual lender and are usually determined based on the equity in the customer’s property and the customer’s ability to make repayments.