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Home » Services » Specialist Services » Secured Loans » What is a Secured Loan?

What is a Secured Loan?

Ciarán Power

Last Updated: February 2nd, 2024 at 6:42 pm

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In the world of lending, a secured loan stands out as a significant option for homeowners. Often referred to as a ‘homeowner loan’ or a ‘second charge mortgage’, it is a type of loan secured against the borrower’s property. This page aims to provide a clear understanding of what a secured loan is and how it functions.

Understanding Secured Loans

A secured loan is a loan where the borrower uses their property as security or collateral. This means that if you’re unable to repay the loan, the lender can take action to sell your property to recoup the debt. It’s considered a second charge because it comes after your main mortgage in priority for repayment if your property is sold.

How Secured Loans Work

When you take out a secured loan, you agree to give the lender a ‘charge’ over your property. This is a legal agreement that gives the lender rights to your property if you default on the loan. The amount you can borrow, the term, and the interest rate on a secured loan can vary significantly depending on factors like the equity in your property, your credit history, and your ability to repay the loan.

Uses for Secured Loans

Secured loans can be used for a variety of purposes. Common uses include home improvements, debt consolidation, and funding major expenses like weddings or education. Because the loan is secured against your property, you can typically borrow more at a lower interest rate compared to unsecured loans.


A secured loan offers a way for homeowners to borrow significant sums of money by leveraging the equity in their property. While it can be a useful financial tool for large expenses or consolidating debt, the fact that it’s secured against your home means there’s a risk of losing the property if repayments are not made. It’s essential for borrowers to consider their ability to meet loan repayments in the long term. For those considering a secured loan, consulting with a financial advisor is recommended to ensure it aligns with your financial situation and goals.

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