Secured loans, as is fairly obviously stated are forms of loans that require some form of security. There are a variety of different forms of secured loans, but today it is the homeowner version of secured loan that we are considering.

A secured homeowner loan is secured on the equity of a primary residence, or for the lucky ones, a second or holiday home Those who only rent their home either from a private individual, a local council or a housing association cannot obtain a secured loan, and would only be eligible for an unsecured loan which is a very scarce commodity in these hard pressed times. The availability of unsecured loans is at the moment very limited even to those who do own their own homes.

Therefore a secured loan is by far the best way for a homeowner to raise money for a number of purposes.In fact a secured loan can be used for almost any legal purpose such as to buy a car, to carry out home improvements, to go on a cruise or any other type of holiday or even to pay for the wedding of your dreams.

A secured loan is secured against the equity on your property. Equity is the difference between the value of your property and the out standing mortgage balance. This means that if your home is worth say 250,000 and the mortgage balance is 160,000 your equity would be 90,000.

Prior to the credit crunch, loan to value secured loans were available up to 100% of the value of the property. Now this is not the case. The old favourite the 125% LTV secured loan plan is also now completely defunct.

Now the maximum LTV available for a secured loan is 80% if the homeowner applying for the secured loan is in employment and 10% less for self employed homeowners. If we consider the example given in the previous paragraph the secured loan for the employed homeowner would be up to a maximum of 40000, and only 15000 for his self employed counter part.

For homeowners with bad credit secured loans are still out there although with much tighter underwriting that before this most awful credit crunch. Before the crunch even homeowners with an extremely bad credit profile could obtain a secured loan up to 75% LTV.

Prior to the credit crunch homeowners facing the repossession of their home could even be saved from this fate at the very last moment by obtaining a secured loan to save the day.Repossession is a terrible thing and sometimes it can happen due to the homeowner having suffered from ill health or redundancy.

In the current economic climate bad credit loans are still available with an equity restriction of a maximum 60%. Two secured loan lenders one of which is First European Securities still grant bad credit loans to homeowners with unlimited adverse at 50% loan to value.

There are still two secured loan lenders in the UK such as First European Securities who grant bad credit secured loans even to those with very bad mortgage arrears, unlimited county court orders etc. However the maximum secured loan on this plan is about 25,000 and the LTV is restricted to 50%. An example of this equity for bad credit loans is that if a property is worth 200,000 , the mortgage balance would have to be under 100,000 for any secured loan whatsoever. If the mortgage is 90,000 the maximum possible secured loan available would be 10000.

Underwriting has tightened up in the secured loan market, especially when we are considering bad credit loans.However bad credit secured loans are still available.

Champion Finance has been established since 1985. They arrange secured loans for all circumstances. Whole of the market remortgages , and mortgages are also available. Get a totally unique version of this article from our article submission service