What are Expat Secured Loans
A secured loan, is a loan in which the borrower offers their property as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the desired loan.
- Secured loans are often called second charge mortgages because they have secondary priority behind your main mortgage.
- The amount you can borrow, term and interest rate depend on property equity, credit history and personal circumstances.
- Secured loans are typically repaid over 2 – 25 years and are for sums over £5,000 upwards, but such figures are not definitive and can be consideraly more.
- Interest rates are likely to be lower than for unsecured loans, but your property is at more of a risk – consider all the options.
- Secured loans are quicker to complete than traditional mortgages. Some lenders can complete everything and disburse the monies within 4 to 6 weeks.
Learn how secured loans can be the perfect choice for you
Main Benefits Of A Secured Loan
Secured loans offer expats and UK residents the opportunity to borrow fairly large sums of money over long periods. Also known as homeowner loans, these are often secured by using one’s home as collateral against the debt. There are both advantages and disadvantages to borrowing money this way, so consumers need to be careful about not taking a loan without clearly thinking it through.
We can help you obtain a secured loan that can be used in almost any way you see fit. Perhaps you need to make home repairs, buy a new car or kitchen or perhaps you are looking to consolidate your existing debt into a single loan.
The flexibility and lower costs offered by this sort of loan is one of the reasons it is so popular among UK consumers and expatriates
Typical Secured Loan Amounts
A secured loan has a distinct advantage over its unsecured counterpart: you have the opportunity to borrow more. Typical amounts range from £5000-£125,000, depending on the lender. How can they afford to loan so much? By requiring your home as collateral. Lenders are less concerned about default when a home is used as collateral, because it gives them a tangible asset that they can sell in the event the borrower does not repay the loan.
For example, let us assume a consumer took out a £50,000 home improvement loan on a property worth £150,000. Assuming the homeowner had already built £50,000 in equity, the risk to the lender is minimal. In the event of default, the lender could take possession of the home, sell it, pay the balance of the mortgage, and still cover its own debt. Obviously, any loan scenario is subject to the borrower’s credit history and ability to repay. A more favourable financial position allows for more favourable loan terms. This includes higher borrowing amounts and lower interest rates.
Other Advantages of Secured Loans To Consider
There are a number of other advantages to choosing a secured loan over an unsecured one. At the top of list are the interest rates offered by lenders. For consumers with good credit and a positive repayment outlook, interest rates of 5% or 6% are not uncommon. It is very difficult to get an interest rate that low with an unsecured loan. On the other hand, there are usually closing costs and other fees that can add up such as valuation fees and solicitors fees. Consumers need to be aware of the fees before taking out a loan.
Fixed monthly payments are another advantage. Consumers who use this sort of financing for homeowner loans find it easier to manage monthly payments by considering them part of the cost of owning a home. This makes budgeting more manageable over the long term. The key, however, is to make sure you obtain monthly payment amounts you can afford. It is possible to lose your property if you cannot afford to keep up the repayments so always bare this in mind.
*Remember we dont just helps expats based overseas we also help residents based in the Uinted Kingdom.