Secured debt

A credit check is a search performed by a would-be loan provider to gauge your eligibility for borrowing. Lenders will look at your credit file to become familiar with your ongoing and previous financial obligations. Lenders can then award you a credit rating to see whether the way that you control you financial matters fulfils their requirements for credit.

Equifax is one of a number of significant credit referencing agencies in the UK. Equifax draws together all your credit statistics from a range of sources to develop a report that indicates your personal financial history – i.e. your credit report. In the event you apply for credit, loan providers will check your credit file to know about your financial record. You could get a printed copy of your report at any point to know that everything is the way it should be. The Equifax website has a lot of valuable information on making sensible financial decisions and protecting yourself from fraud.

A secured loan is where you borrow money and the debt is secured against your assets – normally your home. This means that should you miss your monthly repayments (this is called ?defaulting?) you stand to lose your home as the loan provider can seize it in order to get their money back.

However, secured loans – which can be used for whatever you wish – have the benefit of enabling you to borrow larger amounts of money. Also, secured loan rates normally attract a lower rate of interest than if you took out an unsecured loan. The amount that you can borrow up to is normally based on the amount of equity in your home. This is because you have your home as surety against the debt.

With a secured loan, your monthly repayments should also be lower as secured loans tend to run over a longer period than unsecured loans, therefore ‘spreading’ the repayments.

And if you had a poor credit history but are a homeowner, you should find easier to get a loan if you apply for a secured loan.