Thinking of applying for a secured loan? You may be wondering how long it will take for the funds to reach your account.
Ultimately, it all depends on the secured lender you apply to, as they each have their own unique application system. But what we can say is that it’s likely to take longer for you to receive the funds from a secured loan than a personal loan.
Let’s have a look at why.
Secured loans are also known as second charge mortgages and there’s a reason for this. The loan is secured against your property and the lender takes second priority to your primary mortgage provider.
Because the lender has added security when providing a secured loan, you can often borrow more and pay it back over a longer period than you would with a personal loan. The interest attached to it is also often more competitive.
"If you stop making your loan repayments, your lender has the right to repossess your home."
But if you stop making your loan repayments, your lender has the right to repossess your home to get back the money you owe them. If this happened, money raised from the sale of your property would go first to your mortgage lender, then to your secured loan provider and what’s left after that – if there is anything – will go to you.
That’s why it’s vital to think very carefully before securing a loan to your property. You need to be sure you can afford the repayments. If you can’t, the roof over your head is at risk.
As we said at the start of this article, it can take longer for you to receive the funds from a secured loan than a personal loan or a credit card. While you can get a new credit card within less than a week, and the funds from a personal loan within around a week (from the date of approval), the funds from a secured loan may not be released for four to six weeks, depending on the lender.
But because the loan is secured to your property and you’re borrowing more, the lender has to carry out more checks than they would for a personal loan. Indeed, you’ll find the whole process is not that different from applying for a mortgage.
Because the application process takes longer, you’ll have a longer wait for the money too. This isn’t a process you can – or should – rush.
You can prepare for your secured loan application in a number of ways. To start with, you can use a loan calculator like ours to help you work out how much you’ll pay each month for the sum you want to borrow. If this is more than you can comfortably afford, you may need to rethink your choice.
Once you’ve worked all of this out, take your time to shop around for a loan that works for you. You could also consider using a loan broker like Ocean. Our Smart Search feature provides you with a personalised quote you’re likely to be accepted for, and it doesn’t leave a mark on your credit history.
What can I use the funds for?
Good question. Generally speaking, you can use the money from a secured loan for most things – although a lender will ask you what your plans are for it and your answer could influence their decision.
Because the money is secured to your home, it’s a good idea not to spend the money from a secured loan thoughtlessly. Popular options include debt consolidation and home improvements.
We hope this has cleared up any questions you had about applying for a secured loan. For the answers to more financial queries, come visit us again soon.
Disclaimer: All information and links are correct at the time of publishing.