Secured Loan is designed to protect the lender from the default risk caused by the borrower's inability to pay mortgage payments. This security is guaranteed by some form of asset belonging to the borrower that has a certain amount of value. Secured loans are especially popular among customers suffering from some type of credit history issue. To the benefit of the borrower is also the fact that because a secured loan is deemed less risky, the interest charged on such loan is generally lower than it would have been otherwise charged for the same client.

Secured loans are used for a variety of purposes such as home improvements, debt consolidation, big ticket purchases and other expenditures. Secured loans range anywhere from ?3,000 to ?25,000.

Secured loans come in 2 varieties. There are those that are secured by the property with already existing mortgage and those are called second charge loans. Those that are secured by the property that is paid off completely are called first charge loans. The interest charged on the loan will depend on the amount of equity the borrower has in the property. As a result the borrower with the first charge loan will pay the lowest amount of interest charges. Another benefit of the secured loan is the fact that self employed people with not an extensive business history can easily obtain the funds which would otherwise be unaccessible.

A secured loan is also available when secured by the applicant's savings account. If the customer wants to keep money invested in a savings account he or she can borrow a loan against the amount invested provided that the savings account is left intact. The downside here is that the amount of loan is limited to the amount in the savings account.

Although secured loans are somewhat easier to obtain a standard application process still exists. It can be initiated in the various banks or finance companies branch, online or via telephone. The lender will review the borrower's credit history, his or her income and current financial obligations as well as prior payment problems. Even though the loans can be applied for at any financial institutions the rates will differ from on to another even for the same client. Therefore it is advisable for an applicant to inquire for a quote from different institutions providing the service. In most cases the funds can be obtained rather quickly, usually right after a 7 day consideration period.