Finance glossary
Secured Loan
Also known as: Homeowner loan, Second charge mortgage
In simple terms
A secured loan is borrowing that is tied to an asset you own — usually your home. If you do not keep up repayments, the lender can ultimately take the asset to get its money back.
On this page
What does secured loan mean?
A secured loan uses something you own as security (collateral) for the debt — most often your property. A mortgage is the most common secured loan; a “second charge” loan sits behind your main mortgage on the same home.
Because the lender has this security, secured loans can allow larger amounts or longer terms than an unsecured loan.
How a secured loan works
The lender registers a “charge” over your asset. You repay in instalments as with any loan, but if you default the lender can take steps to repossess and sell the asset to recover what it is owed.
Rates can be lower than unsecured borrowing because the lender’s risk is lower — but you are trading a lower rate for putting your asset on the line.
How could this affect me?
Secured borrowing can be cheaper and let you borrow more, but the stakes are higher: your home could be repossessed if things go wrong. It is a serious step, especially for consolidating unsecured debts.
Turning unsecured debt into secured debt can lower monthly payments but may cost more overall and puts your home at risk — it is worth getting advice first.
Things to watch out for
- Your home can be repossessed if you do not keep up repayments.
- Consolidating short-term debts into a long secured loan can cost far more over time.
- A second charge adds another lender with a claim over your property.
Know your rights
- Second charge mortgages are regulated by the FCA, so lenders must lend responsibly and treat you fairly.
- A lender must normally get a court order before repossessing your home, and courts can allow time to pay.
- You can complain and escalate to the Financial Ombudsman Service.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Secured loans explained (opens in a new tab). Accessed 22 Aug 2026.