A secured loan can be repaid in monthly instalments that may extend up to 25 years. Your loan’s EMI (equated monthly instalment) involves a mix of interest, as well as the principal amount. In initial stages of a loan, since the amount outstanding is more, the interest constitutes a major portion of the EMI. As the loan recedes, the interest becomes less predominant and the principal portion increases in the EMI. You can accordingly decide whether you want to repay your loan earlier or not.



Secured loans provide you flexibility in repayment terms. You can choose a variable rate of interest, a fixed rate of interest or capped rate of interest. The variable rate of interest varies with the fluctuations in base rate of interest as decided by the Bank of England from time to time.

The monetary policy committee of the BoE decides the base rate according to the prevailing situations in the market. Fixed interest rate options against secured loans means that you are required to pay interest at pre-specified rate regardless of the changes in base rate. In case of capped interest rate, the interest rate cannot go beyond the cap provided but within that cap it remains variable.

Since secured loans are taken out by pledging your home, these loans are also known as homeowner loans. These loans offer you many advantages like low APRs, deferred repayments, repayment holidays, flexibility in repayment terms, etc. Many types of finance are available in the UK financial market but when it comes to borrowing big amounts, homeowner loans are largely relied upon by the borrowers.