What is a Homeowner Loan?

A homeowner loan, which is a form of a secured loan or a second charge mortgage, is a loan that is secured against your property. Homeowner loans can be useful if you want to borrow a large sum of money. They are typically used to fund home improvements, consolidate existing debts or fund large purchases.

Unlike unsecured loans, if you have a bad credit history you are still likely to be able to get a homeowner loan. This is because you are providing an asset so the loan company will always be able to get their money back even if you appear to be a riskier borrower.

Another benefit of having an asset as security is lenders can often see this as a smaller risk and may charge lower rates of interest. It is important to remember that you could lose your property if you do not make your payments, so only take out a homeowner loan if you are sure you are financially able to make repayments.