WHAT IS A SECURED LOAN?
This is where you give security to a lender by, giving them rights over your property. This will be a further mortgage over your house or flat. If you fail to meet agreed payments on the loan the lender can ask the courts for permission to evict you from your property. The lender may then take possession of the property and sell it to repay the loan. If you do not raise sufficient funds from the sale you may remain liable for the remaining debt. Repossession is only sought by lenders as a last resort. Customers who are encountering difficulty should do all they can to maintain repayments and contact their lender at the earliest opportunity.
When you take out this type of loan, you provide the lender with security against the money you borrow. This security could be your home, for example. A mortgage is the most common secured loan in the UK as you borrow the money to buy a home and this becomes the security, should you fail to make repayments.
