GUIDES
Secured Loans
Financial stability through collateral-backed borrowing solutions
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Specialist Mortgages - Secured Loans
Here's How They Work
Collateral
To obtain a secured loan, the borrower must offer a valuable asset as collateral. Common types include a home (in the case of a “homeowner loan” or “second mortgage”), a car (in the case of a “logbook loan”), or other valuable assest.
Loan Amount
The amount you can borrow through a secured loan is typically determined by the value of the collateral. Lenders will assess the value of the collateral and offer a loan amount based on a percentage of that value.
Interest Rates
Secured loans often feature lower interest rates, thanks to reduced lender risk through collateral, benefiting borrowers and offering more security for the lenders.
Repayment Terms
Secured loans can have longer repayment terms, sometimes spanning several years, making them suitable for larger expenses like home renovations, debt consolidation, or significant purchases.
Risk to Collateral
It’s essential to understand that if you fail to make your loan payments as agreed, you could lose ownership of the collateral. The lender may repossess and sell the asset to recover the debt.
Helping your transition between homes as smooth as possible
Bridging loans are a flexible financing option that can help homeowners and property investors secure a new property quickly. They are also used in scenarios such as property development or buying at auction, where funds are needed urgently.
However, they come with higher costs due to the short-term nature and are best suited for those who have a clear plan for repayment.
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Understanding when a bridging loan makes sense
Bridging loans are ideal in situations where timing is critical. If you’ve found the right property but are still waiting for your current home to sell, a bridging loan gives you the freedom to move forward without losing out. They’re also commonly used by buyers at property auctions, where completion deadlines are tight and traditional mortgages simply aren’t fast enough. Developers and investors often rely on bridging finance to refurbish properties quickly before refinancing or selling on.
This type of loan is all about speed, flexibility, and opportunity. Lenders can assess and release funds much faster than standard mortgage providers, allowing you to act decisively when a valuable opportunity arises. Whether you’re upgrading your main residence or expanding your property portfolio, bridging finance can be a powerful tool—provided it aligns with your timeframes and repayment plan.
Key considerations before choosing bridging finance
Although bridging loans offer speed and convenience, they require careful planning to ensure they fit your financial situation. Because interest rates are higher than standard borrowing, you should have a strong understanding of your monthly costs, your exit strategy, and how long you realistically need the finance. Most borrowers expect to repay the loan once their current property sells or when long-term financing, such as a traditional mortgage, is secured.
It’s also important to consider the property being used as security. Lenders will review its value, saleability, and overall condition before approving the loan. Professional advice can help you weigh up the benefits and risks, ensuring bridging finance supports your goals rather than creating additional pressure. With proper planning, it can be one of the most effective tools for navigating tight timelines and competitive buying scenarios.
Speak With A Mortgage Advisor today
Contact our friendly mortgage advice team today. Sound mortgage advice from the experts at GoMortgage.
Author: Chris Days - Gomortgage
- 5 Mins
- Updated: Nov 17th 2025
Frequently Asked Questions
How quickly can a bridging loan be arranged?
Bridging finance is designed for speed. Depending on the lender, funds can often be released within 5–14 days, sometimes even sooner if all documents and valuations are in place.
Do I need to make monthly repayments on a bridging loan?
Not necessarily. Many bridging loans allow for rolled-up interest, meaning the interest accrues and is repaid at the end of the term as part of your exit strategy. Some lenders also offer monthly repayment options.
Can I get a bridging loan if my property hasn’t sold yet?
Yes — this is one of the most common reasons people use bridging finance. The expected sale of your existing property often forms part of your exit strategy.
What happens if my property doesn’t sell in time?
If the sale is delayed, you may need to request an extension or refinance onto another product, such as a long-term mortgage. It’s essential to plan ahead and maintain communication with your lender.
Do I need excellent credit to qualify?
Not always. While good credit helps, many lenders in the bridging market accept applicants with imperfect credit, provided there is sufficient security and a clear repayment plan.
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Speak With A Mortgage Advisor today
Contact our friendly mortgage advice team today. Sound mortgage advice from the experts at GoMortgage.
