The reason for this is that secured loans are granted using the equity in your home as security or collateral, regardless of whether you own your property outright or whether it's mortgaged. Secured loans for home owner enjoy lower interest rates than unsecured loans simply because the lending company is taking on a relatively low perceived risk with your home backing the loan. The home owner is taking more of a risk because if they should fall into difficulties and be unable to pay back the loan, they will eventually lose their home through repossession. It is very important that you ensure that your monthly budget can comfortably afford the repayments before committing to a loan agreement.

Some secured loans for home owner are used to consolidate debts on credit cards and other loans and this is called a debt consolidation loan. The main advantage to these loans is that your monthly repayment could be less than the sum of your present debts, but you will be paying over a longer period. You could also find that the pressure you have been under from your creditors is lessened when you only have one creditor to deal with. Your first step towards getting a debt consolidation loan is to find out exactly how much you owe – remember to get a settlement figure from your creditors as this will include any early settlement charges. This is an amount that some lenders charge if you settle your debt earlier than first agreed. Once you have a figure you can find out how much your secured loans for home owner will cost you monthly. It is a good idea to do an income and expenditure exercise so that you are sure that you can afford the loan before you secure it on your home.

The amount you wish to borrow will be subject to an interest charge by the lender, and this is called the Annual Percentage Rate or APR. Lenders advertise typical interest rates for secured loans for home owner but these are purely an indication and not a guarantee of the APR you are likely to be offered. The exact rate you do get is determined on an individual basis and depends on the term of your loan, the loan amount and the lending company's assessment of your personal situation and your ability to pay back the loan. The amount of equity in your home will also be considered. It is also possible to be offered a lower interest rate from the same lender and the same loan product for an online application as apposed to a telephonic application. The reason for this that overhead costs online are lower than other methods of application and the lender passes this saving on to you. With secured loans for home owner you may also have the choice of fixed and variable interest rates. Fixed rates mean that your monthly repayments remain constant throughout the term of the loan and variable rates mean that your repayments could go up and down from month to month depending on fluctuations in the bank base rate.