Secured Loans Calculator
Secured Loans
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debt by regaining the amount originally lent to the borrower. From the creditor's perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. The opposite of secured debt/loan is unsecured debt, which is not connected to any specific piece of property and instead the creditor may satisfy the debt against the borrower rather than just the borrower's collateral.
Purpose
There are two purposes for a loan secured by debt. In the first purpose, by extending the loan through securing the debt, the creditor is relieved of most of the financial risks involved because it allows the creditor to take the property in the event that the debt is not properly repaid. In exchange, this permits the second purpose where the debtors may receive loans on more favorable terms than that available for unsecured debt, or to be extended credit under circumstances when credit under terms of unsecured debt would not be extended at all. The creditor may offer a loan with attractive interest rates and repayment periods for the secured debt.
Types
A mortgage loan is a secured loan in which the collateral is property, such as a home.
A non recourse loan is a secured loan where the collateral is the only security or claim the creditor has against the borrower, and the creditor has no further recourse against the borrower for any deficiency remaining after foreclosure against the property.
A foreclosure is a legal process in which mortgaged property is sold to pay the debt of the defaulting borrower.
A repossession is a process in which property, such as a car, is taken back by the creditor when the borrower does not make payments due on the property. Depending on the jurisdiction, it may or may not require a court order.
United States
In the case of real estate, the most common form of secured debt is the lien. Liens may either be voluntarily created, as with a mortgage, or involuntarily created, such as a mechanics lien. A mortgage may only be created with the express consent of the title owner, without regard to other facts of the situation. In contrast, the primary condition required to create a mechanics lien is that real estate is somehow improved through the work or materials provided by the person filing a mechanics lien. Although the rules are complex, consent of the title owner to the mechanics lien itself is not required.
In the case of personal property, the most common procedure for securing the debt is described through the Uniform Commercial Code or UCC. This statute provides a system of forms and public filing of documents by which the creditor's interest in the property is made known.
In the event that the underlying debt is not properly paid, the creditor may decide to foreclose the interest in order to take the property. Generally, the law that allows the secured debt to be made also provides a procedure whereby the property will be sold at public auction, or through some other means of sale. The law commonly also provides a right of redemption, whereby a debtor may arrange for late payment of the debt but keep the property.
How to create secured debt
Debt can become secured by a contractual agreement, statutory lien, or judgment lien. Contractual agreements can be secured by either a Purchase Money Security Interest (PMSI) loan, where the creditor takes a security interest in the items purchased (i.e. vehicle, furniture, electronics); or, a Non- Purchase Money Security Interest (NPMSI) loan, where the creditor takes a security interest in items that the debtor already owns.
Applying for a personal loan
If you're looking for a personal loan the uSwitch loan comparison service can provide a free, impartial comparison of loans to suit you.
We search over 67 loans from 48 different lenders so you don't have to. Just fill in one form and we'll match your needs to the best personal loans available.
Read our easy step-by-step guide and see how to find the right loan for you
What you'll need to have ready
Before you start, decide how much you want to borrow. With uSwitch, you can apply for loans between £500 and £25,000.
Step 1a: Choose a loan from our loans top deals table
To compare personal loans quickly, use our best-buy tables. Just enter the amount you would like to borrow and the period you want to pay it back over, and we'll show you a table of our top personal loan deals.
Pick the loan that's right for you and click apply.
We'll show you a summary of the personal loan you have chosen and ask you for a few details, including your name, address, email and phone number and then redirect you to your chosen provider's website to view and complete your personal loan application.
If you provide your phone number, you will receive a call from our expert loans brokers to discuss your personal loan options.
The loans service may be able to find a loan which suits your circumstances better.
Any personal details you give us are protected by encryption software and sent securely to prevent fraud.
Step 1b: Use our full loans comparison service.
Alternatively, you can use our full loans comparison service for a more in-depth comparison.
Step 2: Tell us how much you want to borrow and how long you need to repay the loan.
The APR on a personal loan can vary depending on how much you want to borrow and how long the loan is for - the shorter the loan term (the amount of time allocated to repay the loan), the more money you save on interest. Always be sure that you can afford the monthly repayments.
The maximum loan term you can apply for is 10 years.
For loans intended to pay off other debts such as credit cards, remember you won't have to pay the interest on those debts anymore, so this can come off your budget.
Step 3: Decide whether you want Payment Protection Insurance (PPI)
Payment Protection Insurance (PPI) covers your loan repayments if you have an accident, become ill or lose your job and can't pay them.
Our service allows you to compare loans with and without PPI to help you decide whether you want to pay the extra.
Step 4: Tell us if you want to be able to apply online.
If you choose to apply for a loan online through uSwitch, all the loans we show you allow you to go through to the lender's website to complete your application.
If you do not select the option to see 'Loans you can apply online for with uSwitch' the results will include all the loans on the market, including those that aren't available through uSwitch.
Step 5: Add your contact details.
We keep your basic contact details so we can help you with any future queries. This information will also be seen by your chosen lender, who may pass it on to a credit checking agency when deciding if you are suitable for a loan.
Your name and telephone number only will be passed on to our loans broker service who will give you a call to help you find the best loan for you.
You can apply for a loan online for the loan you choose if you wish, but the loans service may be able to find a loan which suits your circumstances better.
Any personal details you give us are protected by encryption software and sent securely to prevent fraud.
Step 6: Click "Continue" for the loans that match your requirements.
Our calculator works out the monthly repayments for each loan and the total amount you will pay back.
The results also show the typical Annual Percentage Rate (APR) and include all the costs involved, such as Payment Protection Insurance (PPI), if you have chosen these extras.
Step 7: See a list of loans and pick one.
Loans are ordered by cost - so the lowest monthly repayment comes first. You can choose to sort them by other criteria, including APR or total amount repayable.
For loans that include online sign-up with uSwitch, click "Apply" to complete your application on the lender's website.
For loans that aren't available online through uSwitch, click "Enquire" for an alternative loan that is either better or the next best match. If you want the specific deal listed in your results, contact the lender directly.
No loans that match your specific requirements? You can amend your details or start the application process again.
Step 8: Complete your online application with your chosen lender.
Your chosen lender will need additional information about your finances, employment status and your partner's situation. They will then run a credit check.
What happens afterwards?
What can you expect after you've applied for your loan online? Here are a few common questions.
I applied for a loan online and then got a call from the uSwitch loans broker. Why is that?
Choosing a personal loan is an important decision. We believe you should have the best advice to help you make it. To help you find the right loan, our expert loans broker will give you a call to discuss your requirements. They have access to many loans, some of which are not available directly through the uSwitch website, which may be better for your personal circumstances and borrowing amount.
How long will it take for the lender to confirm that my application has been successful?
They should be in touch within a week or so, once they've done a credit check.
I've been turned down by a personal loan lender. What can I do?
You may not be eligible for a particular loan, but sometimes the lender will offer an alternative with a higher interest rate. To see if you can find a personal loan with another lender, do another comparison.
Your credit rating is a key factor in whether or not you are accepted for a loan. I've noticed that my personal loan is being referred to as an unsecured loan. Why is that?
They are one and the same. Both personal loan and unsecured loan refer to a loan that is not secured against any property (home or car). A personal loan is given on the basis of your credit rating.
Am I allowed to repay the full amount before the end of the loan term?
Yes, although some lenders will charge you. Read the small print and look out for the terms:
- early repayment penalty
- early redemption fee
- redemption charge
- financial penalty
When you compare loans with uSwitch, you will be able to see which providers charge for early repayment.
Having Problems Getting a Student Loan?
Try Your Local Bank
As has been reported over the past six months in most major news sources (including this blog), the economy is having a direct impact on students' abilities to get college loans. Some banks and institutions have less money to offer; some have no money to offer; some are being much more selective of whom they lend money to.
If you're having problems finding or qualifying for a loan through some of the major, nation-wide lending sources, check with your local bank and credit union. You may be pleasantly surprised at what they have to offer.
Another Guide to Secured Loans
A secured loan is any loan that requires the borrower to provide the lender with some form of security. In the case of secured loans the security will be the borrower’s property, regardless of whether it is mortgages or owned outright. Loans secured against property that is already mortgaged are known as second charges, whereas loans secured against a property owned outright with no existing mortgage in place are known as first charges. See below for a quick guide to secured loans.
STEP 1 - WHICH LOAN?
Secured home-owner loans are available in varying amounts and for many different purposes, including debt consolidation. The amount available usually ranges from £3,000 to £50,000, although some lenders will consider lending up to £100,000. The amount borrowed is repaid monthly over a term agreed at the outset, which will usually range between three years and twenty five years. You may be charged a penalty if you repay your loan earlier than agreed, and you should check each lender’s individual policy with regards to this.
Lenders charge interest on the amount you borrow, which is referred to as the Annual Percentage Rate (A.P.R). The amount you can borrow, the term available and the A.P.R will all depend upon the equity you have in your property, the lender's view of your ability to repay the loan and your personal circumstances, for example any adverse credit. Subject to your circumstances, you may be able to borrow up to 125% of the property value. The A.P.Rs quoted by the lender will usually be typical rates, and these act as a guide only as the exact rate offered will be on an individual basis. As a general rule, it is advisable to compare the A.P.Rs of different loans, as this is a good way to determine how competitive they are.
Generally, secured loans are much easier to obtain than unsecured loans. This is because the lender has the added benefit of security, which provides protection in the event of a customer's inability to repay. This also means that persons who are self-employed, have recently changed jobs or who have adverse credit can take out a loan. They are also useful for larger amounts or where the applicant requires a longer repayment period.
STEP 2 - HOW DO I APPLY?
Lending institutions offer you the option of taking a secured loan via their branch network, over the telephone, via a written application or online through their website. Initial assessment of your application can be made quickly, however loans under £25,000 are regulated, and a 7 day consideration period will be given to allow time for you to assess the implications of the credit agreement, and to ensure that you are fully aware of all the terms and conditions. When assessing your application the lender will consider your income and financial commitments to determine whether you can afford to take on and repay additional finance. They will look at your past credit history and take into consideration any adverse credit such as mortgage arrears, defaults or county court judgements. All lenders insist that where an applicant is married, both parties should be named on the application form.
Lenders frequently use credit scoring facilities and credit reference agencies to assess your suitability. Credit scoring assesses your personal circumstances and statistics to determine which broad category of borrower you fit in to. Credit reference agencies provide a detailed analysis of your financial position as they hold information relating to your credit history, any adverse credit and any existing commitments. They also provide address and electoral roll information. If you are refused a loan or wish to make enquiries concerning your own credit file you can apply to the credit reference agencies for a copy of your credit file. This service is subject to a small fee.
Equifax PLC
You can also view your credit file with Equifax for only £12.50. They also offer easy to use online facilities to dispute errors in your credit file instantly.
STEP 3 - HOW AM I PROTECTED?
A secured loan is subject to The Consumer Credit Act 1974. The Act contains strict regulations about how money is lent and covers loans up to a value of £25,000. Loans for sums greater than £25,000 are unregulated. When taking out a secured loan you will be asked to sign a credit agreement, which should be read carefully as the terms are binding. For regulated loans of under £25,000 the lender must provide a consideration period of 7 days. Lenders offer insurance policies and payment protection schemes to cover your monthly repayments in the event of accident, sickness, unemployment and death (conditions apply). Cover does vary between lenders, as does the cost, therefore you should check individual policies for what is included, and just as importantly, what is excluded.
If you are considering protecting your repayments in the event of accident, sickness, unemployment or death, why not browse our Mortgage Protection and Income Protection finders.
If you do experience difficulties with your repayments, seek advice from your lender as soon as you can. Remember, your property acts as security for your loan and it is therefore at risk in the event of any repayment problems. The earlier you seek help, the more sympathetic your lender is likely to be. You can also seek help from voluntary organizations such as the Citizens Advice Bureau.
YOU CAN APPLY FOR A LOAN WITHOUT LEAVING THIS SITE!
Moneysupermarket.com provides you with the facility to apply online for your secured loan. Providing the product has a red apply icon, you can submit your application without leaving our site. This will ultimately save you time, as it means you won’t need to contact service providers direct.
When you apply through moneysupermarket.com you will either complete a short application form via our secure server, be re-directed to the service provider's website to enable you to follow their own application process or you will be asked to submit your details for a member of our Sales Support Team to contact you. Once your application has been submitted to us, either money supermarket or the service provider will send you an e-mail acknowledging your application. If you completed our application form, it will be passed to your chosen provider in order that they may process it.
If for any reason your application is declined, money supermarket may be able to direct your application to a provider who can help. We have a Support Team who can be contacted by telephone should you require any further assistance along the way.
Security
All of your personal information is secure with money supermarket. Our site is protected by Veri Sign Secured encryption which provides a secure communication between our website and the visitors to it. Confidential information is passed to us via a secure server only
Any information you provide is submitted to your chosen service provider in encrypted format to ensure security and privacy at all times.
Please note, Moneysupermarket does not charge a fee for the service it provides. Our income comes from the providers, who pay us a fee when you complete your purchase. We recommend that you read the guides available throughout the site for more information on the type of product you are interested in (credit cards, loans, mortgages, savings accounts, current accounts, stakeholder pensions, legal services, business finance). You should also take time to read our Terms and Conditions, and in any case you should do so before using any of the services provided by this site.
Having Problems Getting a Student Loan?
Try Your Local Bank
As has been reported over the past six months in most major news sources (including this blog), the economy is having a direct impact on students' abilities to get college loans. Some banks and institutions have less money to offer; some have no money to offer; some are being much more selective of whom they lend money to.
If you're having problems finding or qualifying for a loan through some of the major, nation-wide lending sources, check with your local bank and credit union. You may be pleasantly surprised at what they have to offer.
