What do lenders consider when arranging secured loans?

Last post: Sep 20, 2018

Once upon a time, a payslip, a valuation and quick credit search were all that was required to arrange a secured loan (second charge mortgage). Today processes and regulations are, quite rightly, much more stringent.

 If you're interested in making use of a second charge mortgage (i.e. a loan secured against your property), you may be wondering how stringent checks are and how lengthy the process of arranging the loan will be.

Your concern is understandable. Many people who decide they require a secured loan are often facing emergency expenses that much be covered promptly. Common emergency costs secured loans are used to cover include veterinary bills, the cost of unexpected property repairs, replacing totalled or damaged vehicles. These expensive, but essential, tasks need to be funded. If you don't have access to savings, a secured loan is one of very few options available.

So, it's normal to feel anxious about how long the process will take – and whether or not your application will be accepted.

Yes, today's secured loan application process is much more detailed than it once was. Lenders can no longer promise "an answer within 24 hours". But this is, for most people, a good thing. Stricter, more thorough processes are designed to ensure the affordability or secured loans – ensuring you don't find yourself in financial difficulty with a loan you cannot service.

The application process for secured loans differs from lender to lender, but you should expect to need to provide or undergo many of the following:

  • Photographic ID
  • A thorough valuation of the property
  • A thorough assessment of loan affordability
  • An assessment of your income and expenditure
  • A review of your finance usage (including short term loan usage)

While this may all sound like a lot of time-consuming paperwork, repossessions have dropped to below 1% in recent months, making all this care well worth it.

Arrange a secured loan you can rely on, completed as quickly as possible. Contact our team to explore your best borrowing options today.