by Charles Landa

What factors may negatively influence the secured loan application?

When you apply for a loan it is normal that you will be asked to consent to a search at a Credit Reference Agency, such as Experian or Equifax. The purpose is to avoid fraud and for the lender to assess your credit worthiness. Some factors may have an adverse effect on the secured loan application, such as:

• Bankruptcy or Individual Voluntary Arrangement
• Low income or self-certification of income
• Mortgage or rental arrears
• Frequent job changes
• Frequent address changes
• High indebtedness
• Court judgments

But even with a poor credit record, you have a good chance of obtaining a secured loan providing you have plenty of equity in your property. However, you may be asked to pay a higher interest rate if your credit score is low.

Is it important to seek independent, impartial advice?

There are literally thousands of loan and mortgage products available. As we only tend to purchase financial products infrequently, you will not know which products are available or suitable without a serious research effort. For this reason, we believe that most people should seek independent, impartial advice, especially as mortgages and secured loans normally represent a substantial commitment. This should not cost you any more as the advisor is normally paid directly by the lender.

What are the drawbacks of a secured loan?

Although there are many benefits of a secured loan, there are some drawbacks that should be mentioned. In cases where a borrower fails to repay a loan, the property could be taken into possession and sold. Borrowers can also be tempted to borrow large sums for long periods without appreciating the commitment to repay a significant amount of interest, even when interest rates are low.

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About the author

For more information, please visit http://www.burtplan.co.uk. Burtplan Personal Finance is a leading UK loan and mortgage broker. With 50 years experience, the company acts as both a lender and broker for personal loans and secured loans, and as an introducer for mortgages. Burtplan Personal Finance works with secured homeowner loan brokers who are qualified to give advice under the Consumer Credit Act and will search the market to obtain the best deals for clients.