When you apply for a secured loan, you’ll normally need to provide:

 •  your application form 
 •  proof of homeownership 
 •  proof of address for the previous three years 
 •  proof of income and outgoings (e.g., bank statements)

Yes, you may still be able to get a secured loan. There’s no specific credit score needed. Plus, secured loan lenders tend to place less emphasis on your credit score (compared to unsecured lenders), as your asset reduces the risk of them not getting their money back.

There are also some lenders and brokers who specialise in helping those with less-than-perfect credit scores to find finance.

There’s no specific credit score required for a secured loan. With the loan secured against your home, you are more likely to be accepted despite having a lower credit score.

However, having a higher credit score does further increase your chances of being accepted and receiving better interest rates.

A secured loan can help your credit score if you pay it on time, every time. Doing so will show lenders that you are a responsible borrower who can manage finances well.

By the same token, if you fall behind with repayments, your credit score will be impacted.

If you have a less-than-perfect credit score, you could consider getting a credit builder card. As long as you always pay on time and make at least the minimum amount, then your credit score should increase gradually.

If your financial situation changes for the better or you want to move house, you may decide to pay off your secured loan early. You should be able to do so, but early repayment charges may apply in some cases.

Secured loans enable you to borrow more money with lower interest rates (compared to unsecured loans), even if you have less-than-perfect credit.

However, you need to be confident that you can afford the loan repayments, as your home is used as security.

Remortgaging is often seen as an alternative to getting a secured loan. The best option for you will depend on your individual circumstances and the cost involved. In both cases, you are borrowing money against your home, which means it could be at risk if you don’t stick to the repayments.

If you sell your home with a secured loan on it, there may be a couple of options available to you:

• Repay the loan early using the proceeds of the house sale. However, this could mean paying Early Repayment Charges.
• Alternatively, you might be able to transfer the loan to your new property.

Each lender will have their own policies referenced in their terms.

You may be able to get a secured loan against your car with a different provider – though this can be expensive and the lender could repossess your car if you don’t stick to the repayments. Here at Ocean, we provide secured loans that use only your property (not your car) as security.

Some lenders do offer pension loans that are secured against your pension pot. This is not something that we offer at Ocean. If you’re interested in this option, it's best to speak to an independent financial adviser.

It’s worth weighing up the alternatives so you make the right choice for your individual needs and circumstances.

Remortgaging

Remortgaging is the process of switching your current mortgage to a new deal – sometimes with the option to borrow extra cash against your property for other purposes. Our qualified mortgage advisers would take all circumstances into consideration to find the most suitable solution for you.

Personal loan

A personal loa (or unsecured loan) is a lump sum of cash that you repay in monthly repayments over a set period. Unlike a secured loan, it isn’t tied to an asset. However, loan amounts tend to be smaller, and the best rates are usually reserved for those with the highest credit scores.

Credit card

If you only need to borrow a small amount, you may prefer to use a credit card. Just be aware that credit cards usually come with interest – and at a higher rate than most loans. If you are approved for a 0% interest credit card, make sure you clear the balance before your interest-free introductory period ends.

Guarantor loan

Guarantor loans are designed for people with bad or thin credit histories. With these types of loans, you ask someone you trust to act as your guarantor – this means that they will be legally responsible for paying the debt if you do not meet the repayments. A guarantor would typically be aged 21-75 years and should have a good credit history. With this added safety net, the lender may be more willing to accept your application. However, guarantor loans tend to come with higher interest rates than some other loans.