Choose ‘Auto’ or ‘Manual’ – The ‘Auto’ setting will enable the ‘interest rate’, ‘lender fee’ and ‘broker fee’ to all set automatically. The settings are based on the information entered for ‘loan amount’, ‘loan term’, ‘property value’, ‘mortgage balance’, ‘credit history’ and ‘defaults in the last 12 months’.
If ‘Manual’ is selected then you will need to enter the ‘interest rate’ (annual), ‘broker fee’ and ‘lender fee’.
Personal Details section
Property Used as Security
Finally press or click on the ‘calculate button’.
Our Secured Loan Calculator will then instantly provide a detailed loan quote.
|Loan Amount Loan Amount - This is the net loan amount required that you entered.||£ 0|
|Loan Term Loan Term - This is the loan term in years that you selected.||Years|
|Interest Rate Interest Rate - This is the annual rate of interest being charged on the loan facility.||9 %|
|Loan To Value (LTV) Loan To Value (LTV) - Illustrates the amount of equity being used in your home. This is calculated by adding your first charge mortgage and this second charge loan together, then illustrating it as a percentage of the property value.||NAN %|
|Broker Fees (5%) Broker Fees - The broker fee is added to the net loan amount required along with the lender fee below and is then illustrated as the Gross Loan Amount. In ‘Auto’ setting we charge a broker fee of 5% of the ‘Loan Amount Required’ which is capped at £1,950.||£ 0|
|Lender Fee Lender Fee - The lender charges a fee which is added to the loan along with the broker fee. Loan Amount + Broker Fee + Lender Fee = Gross Loan Amount.||£ 595|
|Gross Loan Amount Gross Loan Amount - This is the net loan amount required plus the broker fee and lender fee. This is total loan facility and is the amount that the interest rate is applied to in order to calculate the interest charges.||£ 595|
|Total to Repay (if full term) Total to Repay - This is the total amount you will pay back if the loan runs its full term and all monthly repayments are made on time. Clearing the loan early will reduce this amount.||£ nan|
|Interest Only Interest Only - This is the interest only repayment figure.||£ 0|
|APRC APRC - Stands for Annual Percentage Rate of Charge – It is different to the annual interest rate quoted above because it includes all other costs associated with the loan, for example the broker fee and lender fee. It is an illustration of the real cost of the loan.||nan %|
|Monthly Repayment Monthly Repayment - This is the monthly repayment amount required based on the loan amount you require, fees and the loan term. In ‘Auto’ setting this also takes into consideration the credit history and defaults selection, along with the Loan to Value.||£ inf|
The minimum you can borrow is £5,000
Please update the amount you wish to borrow.
Our secured loan calculator provides instant results without asking for any of your personal contact information, like your name, email address or phone number.
By entering the loan amount and term that you require, along with 4 simple bits of information, the calculator will provide an illustration detailing a possible loan option. This will include monthly repayments, interest rate and set up costs. It will illustrate the loan amount you selected plus any fees and costs that are added to the loan.
You can use the calculator as much as you like to help determine a suitable loan amount and repayment term.
If from the information provided a loan option is not possible, the calculator will help you determine what the problem may be. You can then experiment with different loan amounts to see what other options could be available.
We have also provided a detailed section below ‘Will I get Approved for a Secured Loan’ which explains the different lenders’ overall lending criteria and options available to us. From this you can see if you meet the lending criteria required for a loan approval. Many loan options do not involve credit scoring, so provided your application fits the criteria, then you should be approved.
So even if you have been declined by for a secured loan, there may still be options available to you.
There are no upfront costs involved with setting up a secured through ourselves – all fees can be added to the loan facility and paid back within your monthly repayments.
Also, these fees are only payable once the loan has been paid out (the funds have been released to you) – there is no financial commitment required at any stage of the application process.
The set-up costs involved with taking out a secured loan are:
This is detailed in the ‘mortgage illustration’ from the lender, and can could also be referred to as an ‘Acceptance Fee’ or ‘Administration Fee’. This is charged by the lender to cover the costs of setting up and organising your secured loan.
This fee will be likely range between £495 and £1,995 depending on the lender and also the type of product chosen.
This is a fee charged by the broker for arranging the loan facility.
At KIS Finance, we always ensure that our clients get the best possible all round deal. Consequently we charge the lowest broker fee currently on the market.
Our Broker Fee is the most competitive in the UK! - 5% of the net loan amount, capped at £1,950.
The broker fee is added to the loan facility and will be detailed in your loan agreement.
In almost all cases, we will have an option to proceed without the need of a physical valuation.
For these cases, lenders use an automated online valuation to determine the value of your property. This is often referred to as an AVM or desktop valuation. For these types of valuations, the lenders absorb all the costs.
In a very small number of cases, for example if you’ve done a lot of work to the property, a drive-by or full ‘physical’ valuation may be required. This will be carried out by a professional surveyor, commissioned by the lender.If a full valuation is required, then the cost of this will usually be paid by ourselves.
Please note: these are the only costs that will be involved when you take out a secured loan through KIS Finance.
Be aware that other costs may be involved if taking out a secured loan through another broker or if dealing with a lender direct.
Like a mortgage, most secured loans will have a fixed-rate introductory period of between two and five years, after which you will be charged the lender’s standard variable rate.
The interest rate will stay fixed for the duration of the introductory period, meaning your monthly repayments will remain the same.
After this period has ended, the interest rate will revert to the lender’s variable rate which means your repayments could go up or down.
Lenders’ standard variable rates often fall in line with the base rate set by the Bank of England. This means that the interest rate charged on your loan could fluctuate throughout the term without any warning. These rate changes could be up or down, so it is important that you consider this when you are assessing affordability.
If you want to clear the loan facility during the fixed or introductory rate period, you may be charged a penalty fee as the lender will be losing out on future interest payments.
The charge will be dependent on the lender and also what type of product you have and how long you’re fixed in for.
Typically, lenders will charge a small percentage of the outstanding balance at the time of redemption, or they will charge a certain number of months’ interest.
Secured loans are also commonly known as second charge mortgages or homeowner loans because they are secured against your home like your mortgage. When compared to other finance options they allow you to borrow large amounts of money over longer repayment terms, and often be used as an alternative to re-mortgaging.
A secured loan is ‘secured’ against the value in your home, making use of the available equity to provide a reduced risk to the lender, who in turn are then able to offer lower interest rates and more flexible lending criteria:
A secured loan can be used for almost any reasonable and legal purpose.
The following property types can be used as security:
Please note: We are unable to use commercial or semi-commercial property as security.
To qualify for a loan you must meet the following lending criteria:
If you have used our secured loan calculator above and have been provided with loan terms, then congratulations you are past the first stage.
For the calculator to have provided loan terms, then the answers to the following questions should all be yes:
There is sufficient equity in your home for the loan that you require. This means that the amount of your mortgage balance, plus the loan amount you require, should not be more than the market value of your property. This means that the maximum loan available to you is the estimated market value of your home less the balance outstanding on your mortgage.
Value of property = £400,000
Mortgage balance = £250,000
Maximum second charge loan available = £150,000 - for applicants with a good credit history
This may be limited to £100,000 for applicants with an average to poor credit history
We need to work out how much admissible income you have each month. To do this you will need to work out your total net income (after tax and other deductions). You then need to deduct from this your monthly mortgage payment and any other finance payments that you will still have in place after receiving your loan, such as credit card payments, car finance or other loans. You don’t need to include any finance payments that you are clearing with the loan.
You then need to deduct the monthly repayment that you will be paying on your new loan.
Once you have done this, you will need to have enough money left to cover shopping, pay your bills and entertainment, etc.
Net pay applicant 1 = £2,500
Net pay applicant 2 = £1,750
Total income = £4,250
Monthly mortgage payment = £1,200
Car finance = £378
Personal loan = £225
New Loan Facility = £600
Total = £2,403
£4,250 – £2,403 = £1,847 remaining after you have the new loan
If you don’t meet these requirements then there may be a problem with affordability.
To help your application fit with the lender’s requirements you could consider extending the term of the loan or possibly look at consolidating some of your outstanding items of finance.
You can call us to discuss this further with one of our expert advisors.
Even if you’ve been refused a personal loan due to adverse credit, you may still be able to take out a secured loan.
Lenders are more flexible towards applicants who have experienced financial difficulties in the past as you are providing an asset as security.
A new loan facility may also help to improve your credit profile if you are using the loan to clear up existing credit commitments.
As you are providing security, you can normally borrow a much higher amount than you would be able to with an unsecured or personal loan.
The amount you can borrow will be dependent on the amount of equity in your property and also your income.
With the ability to borrow for up to 35 years, the cost is spread over a long period of time, making the monthly loan repayments more manageable and affordable.
Interest rates will usually be much lower than those on an unsecured or personal loan as security is provided and re-payment is guaranteed.
Taking out a second charge mortgage may be a cheaper way of releasing funds from your property than re-mortgaging. This is because you may be tied into your mortgage product and have expensive exit fees – a second charge mortgage allows you to keep this in place but release further money.
If you have adverse credit, you may still qualify for a loan as you are providing an asset as security.
You can use your loan for any reasonable and legal purpose.
If you sell or re-mortgage your home then you will most likely have to repay the loan facility from the proceeds.
If you default on the loan facility, the lender may apply to the courts to repossess your home.
Second charge mortgages can provide a more suitable and flexible alternative to re-mortgaging.
Here are some of the reasons why:
The rates and various fees associated with re-mortgaging can be highly expensive compared to the cost of setting up a second charge mortgage.
If you are already on a very good deal with your current mortgage lender, you may not want to change this. A second charge mortgage will allow you to keep your current mortgage but still release further funds from your property.
Terms start from just three years.
A lot of mortgage lenders will charge a penalty fee if you want to want to re-mortgage and exit the term early. By taking out a secured loan instead, your current mortgage will remain in place so you will avoid these additional costs.
The loan-to-value is the maximum amount that a lender will consider lending, as a percentage of the value of the property you are securing the loan on.
If you require a loan of £60,000 secured on a property valued at £100,000 (assuming there is no other finance secured on the property), then the loan as a percentage of the property’s value would be 60% - this is the loan-to-value ratio.
Example One: If you want to buy a property with a value of £300,000 and the mortgage lender offers a maximum loan of a 85% LTV, then the maximum you could borrow against the property would be £255,000. This means you would need a deposit of £45,000.
Example Two: If you own a property valued at £500,000 and have £200,000 left to pay on the mortgage, then you have equity of £300,000.
Then you want a secured loan and want to know the maximum amount you can borrow.
If the lender is operating at a maximum of 75% LTV, then the total amount allowed to be secured against the property would be £375,000. The mortgage is already taking up £200,000 of this, so the maximum second charge secured loan you could get would be £175,000.
Equity is the percentage of your property that is free of a mortgage or any other loans – in other words, the percentage owned by you.
For example: If you own a property worth £300,000 and you have an outstanding mortgage balance of £150,000 and a secured loan of £20,000, your equity is £130,000.
Calculation: £300,000 – (£150,000 + £20,000) = £130,000
To reflect the safer lending, secured loans will generally offer higher loan amounts and lower interest rates than unsecured loans.
Our aim is to have the whole process from application to completion done within 1 week. For some cases it can all be done in as little as 48 hours, and the very occasional application can take up to 2 weeks. Most importantly however, we will process your application at whatever pace you prefer.
The chances of being accepted are often higher than for a personal or unsecured loan. As long as you have sufficient equity in a property, a regular income and no major problems with your credit history, you are likely to be accepted. This is because a loan secured against property is a much safer option for lenders as repayment is guaranteed given the security provided.
They can be used for any reasonable and legal purpose. Here are some of the more common purposes, although your options are not limited to these:
Paying off higher rate loans and other debts, also known as ‘consolidating debt’, is one of the most common uses for this type of loan.
They can be used to pay off credit cards, overdrafts, personal loans, vehicle finance, catalogues, retail credit facility and other credit facilities.
This can make managing your finances a lot easier as you’ll be swapping multiple monthly repayments to just one payment and one interest rate.
KIS Finance have access to the whole of the market, meaning we can arrange loans with any lender. Some lenders will accept applications from borrowers with bad credit, so it is worth discussing your situation with one of our advisors to see what options there are for you.
You will need proof of identity and proof of residency, such as a passport and a utility bill. Proof of income is also required, depending on the nature of your employment this could be payslips, bank statements, accounts etc.
It is possible to borrow up to 100% of the value of your property, although not all loan plans have such a high loan to value (LTV) ratio. Any existing debt secured on the property, such as the mortgage, needs to be included.
You have a property worth £100,000 and a mortgage balance of £60,000. If you can borrow up to 90% LTV, that means you can borrow up to £30,000.
The amount you can borrow may also be limited by how much you can afford to pay each month, or specific lender criteria.
They can be taken out for terms of anywhere between three and 30 years. The longer the term, the lower the monthly repayments will be but the more interest you’ll pay over the term of the loan. If the term is shorter then the monthly repayments will be higher, but you will pay less overall as you’ll pay less in interest.
Yes, you can pay off your loan before the end of the term, but you may be a charged an early redemption penalty if you’re within the fixed or discounted rate period.
Yes, loans are available to clients who are self-employed. However, income will need to be proven and you will need to provide evidence of your income. This is typically through trading accounts and tax returns.
For financial products such as mortgages and second charge mortgages, you will be given a 7 day reflection period after your formal loan offer. This will give you the time to properly consider the offer and decide whether you want to proceed with the full application. You don’t have to take the full 7 days, but be sure to take this time if you need it.
The consequences of missing repayments on a second charge loan can vary, but ultimately, the lender has a legal right to take possession of your home to take back what they are owed. As soon as you realise that you may have even the slightest difficultly in making your repayments, you should contact the lender to see what options there are.
Defaulting on any finance repayments will also have a negative effect on your credit score and may make it more difficult to obtain credit in the future.
If you do not make the monthly payments, the lender can go to court to get possession of the property. If possession is granted, you will have to leave so that the property can be sold. The proceeds of the sale are used to repay any debt that is secured on the property in order of the charges - so the mortgage provider would be first in line to receive their money, then the second charge loan provider.
A second charge mortgage is the same thing as a second charge loan, a secured loan and a homeowner loan. There are lots of terms for the same thing.
It is a loan which is secured on property, the first charge being the mortgage. If you do not pay any loans that are secured on property, the lender can eventually repossess the property and sell it to get their money back. The order of the charges on the repossessed property determines the order in which the lenders receive their money back, for example the second charge lender would only receive their money if there was enough to repay all the debt owing to the first charge lender.
Certain factors can either increase or decrease the amount of equity you have in a property.
Factors that increase equity: Paying off debts secured against the property, an increase in the market value of the property (through general market increases or by making improvements to the property).
Factors that decrease equity: Securing a new loan against the property or a fall in the market value of the property.
Ultimately it won’t affect your current mortgage, however, the second charge lender will often need permission from the mortgage lender before they can place a charge on the property.
This will be down to the lender’s discretion at the time. It will depend on the value of the property and your ability to meet the lending criteria.
Just enquiring about your options will not affect your credit score. If you want to proceed with a quote you are given, the lender would need to do a full credit search sometime before completion, which would leave a trace on your credit file.
Taking out a new finance agreement can positively or negatively affect your credit score, depending on how you keep up with the repayments.
Yes, as long as there is enough equity in your share of the property.
You must be at least 18 years of age and a homeowner.
You can take out a loan at any age as long as it can be fully repaid by your 80th birthday.
The term can be anywhere from 3 to 35 years.
As the loan is secured against your property, there is some risk involved. Even though it is a last resort, your home could be repossessed if you don’t keep up the repayments. So, as long as you make all the repayments on time, there should be no problem.
A homeowner loan is a secured loan, as you need to own a property to qualify.
Last updated: 22 November 2023 | © KIS Bridging Loans 2020