Second charge mortgages
Car loans and logbook loans
Debt consolidation loans
Home improvements loans
This is the most common type of loan in the UK and involves securing your loan against your home. The amount you can borrow is calculated by loan-to-value (LTV). Most lenders allow you to borrow up to 70-80% of the property value, so this would be a mortgage with a 70% or 80% LTV and you will be required to pay the remaining amount in the form of a deposit. Mortgages come in different forms including interest only, fixed, tracker and offset mortgage – and your home can be at risk if you do not keep up with repayments.
Second Charge Mortgages
This is an additional loan on your existing mortgage, also known as a second charge loan. You will have the main mortgage for your home (this is your first charge) and if you want an additional loan on your mortgage, it is known as a second charge, because it is the second amount that is charged.
The amount you can borrow on your second charge mortgage is less than the original mortgage and you will usually need a bit of equity in your home (having paid off some of your mortgage). It is commonly used to raise funds for things like home improvements, weddings and debt consolidation.
Car Loans and Logbook Loans
You can borrow money by securing the loan against your vehicle. If you apply for car finance, you will be able to start using the car right away and make monthly payments towards owning it outright. If you fall behind on repayments, your car could be repossessed by the car finance provider.
With logbook loans, you can secure the loan against your car, bike or van and transfer your V5 document, known as your logbook, to the lender during the loan term. The car typically needs to be less than 5 years old and you can borrow up to 80% of the car’s value (with a maximum of £50,000 over 3 years).
Debt Consolidation Loans
This is used to consolidate all your existing debts into one single affordable monthly loan. This is an effective way to organise your finances and eventually become debt free. Many households prefer the option to make one single repayment each month, rather than paying off multiple debtors and trying to keep on top of it. To access the funds upfront, the loan can be secured against your home or car, or you have the option for this to be unsecured too. You can also borrow up to £50,000 or sometimes more, depending on the lender.
Home Improvement Loans
For those looking to make changes to their home, you can apply for a secured loan for home improvements. Whether it is a new kitchen, loft extension or making the home adjusted to senior living, you can borrow money against your home’s value. This can be secured or you can apply for an unsecured loan for home improvements too if you prefer.
This type of property loan is used to bridge the gap between moving and purchasing a new property. It is used by thousands of households each year who need to buy a property but have not yet sold their own home yet.
In addition, it is used by many property developers and investors looking to buy properties whilst avoiding traditional property chains and the long winded mortgage application process. Bridging loans come with greater risks, since you could lose your home if you do not repay in 12 months. The amount you can borrow can be starts from £25,000 up to £25 million.
Collateral loans involve taking anything valuable that can be used as collateral and securing your loan against it, including art, watches, jewellery, memorabilia and more. You will typically have the collateral valued impartially beforehand and receive up to 80% of its value upfront. However, you can risk losing this pricey item if you do not keep up with your repayments.