What Not to Do When Taking out a Secured Loan

Posted in: Insurance

If you’re looking to renovate your kitchen and bathroom or have another home improvement project lined up, then taking out a secured loan could be an option for you. A secured loan could provide you with adequate funds, but there are other options available such as savings, a credit card or a personal loan.

There are still risks attached when taking out a secured loan and by avoiding these easy to make mistakes there’s no reason why a secured loan couldn’t be right for you.

Don’t Barely Read the Terms & Conditions

Different lenders will have different rates, repayment periods and terms and conditions so you must ensure you read these thoroughly before proceeding. Use an established secured loan lender you can trust.

Whichever lender you use, working out the rate, repayment period and how much in total you’ll need is key. If you are in a fortunate position, you may be able to pay the loan off early, but some include early repayment charges so make sure you make enquiries with the lender beforehand.

Selling Your Home

Although possible, selling your home in which the loan is secured against and buying a lower value property may require you to partly or fully pay the loan off therefore making it difficult to move if you are not in a position to do this. You will need to consider this when looking at the term of the loan with the lender. If this is a particular concern to you, it may be worth seeking independent advice.

Don’t Forget About the Risks

Forgetting about the risks attached to a secured loan can lead to complacency in making repayments. The number one reason it is essential you plan ahead well and ensure you can afford to meet repayments is because otherwise your home can be repossessed.

Be vigilant when researching and taking out a secured loan and remember the list of what not to do.


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