How to compare secured loan rates and fees

The state of secured loans in 2025

Secured loan rates in the UK are tracking between 3.9% and 15% APR, with most real-world offers landing nearer 5.8% to 12.3% for borrowing from £10,000 to £250,000. Lenders price deals based on credit score, loan-to-value, loan amount and term length. If you are a homeowner looking to consolidate debt, fund renovations, or release equity, the headline rate is only the starting point. The total cost is shaped by fees, how long you borrow for, and whether your rate is fixed or variable.

Understanding APR is useful, but for secured loans the figure that does the heavy lifting is APRC - the Annual Percentage Rate of Charge - which includes standard fees and gives a truer picture of what you will pay over the term. UK lenders must show APRC, which makes side-by-side comparisons fairer. When a rate looks unusually low, APRC is the reality check that can reveal added costs such as arrangement and valuation fees.

The advantage of a secured loan is straightforward: you can usually borrow more, over longer terms, at lower rates than unsecured credit. The trade-off is risk. You are using your property as collateral, and missing payments can lead to arrears charges and, in the worst case, repossession. That is why affordability and flexibility matter as much as price. A lower rate with a restrictive overpayment policy can cost more if you plan to clear the balance early.

In today’s market, terms range from 3 to 30 years. Longer terms reduce the monthly outlay, improving budget comfort, but typically increase the total interest paid. Fixed rates offer predictable payments that suit tight budgets. Variable rates can start lower and may appeal if you expect rate cuts, but they introduce uncertainty. Many UK lenders allow borrowing up to 85% LTV, subject to equity and affordability checks.

A low advertised APR is not a bargain if fees, inflexible terms, or a variable rate leave you paying more overall.

As a UK-based retail finance broker, Kandoo helps you interpret the fine print and compare quotes from established lenders such as United Trust Bank, M&S Bank, and People’s Choice, alongside others on the market. Crucially, you can use eligibility tools from major comparison sites to see likely deals without impacting your credit score. That allows you to shop around first, then apply with confidence.

Who benefits most from this guide

This guide is for UK homeowners weighing up secured borrowing to consolidate higher-cost debts, fund home improvements, or unlock equity for major purchases. If you need a larger sum than most unsecured loans offer, want longer to repay, or prefer a potentially lower rate, secured lending is worth exploring. It will also help if you have a mixed credit profile and want to understand how credit score, LTV, and property value shape pricing. If you are risk-averse or anticipate early repayment, we show you how to assess fees, flexibility, and the real-world cost before you commit.

The terms you will actually see

• APR vs APRC: APR is the annual rate. APRC includes standard fees and reflects the full cost of a secured loan over the term. Lenders must display APRC.

• LTV: Loan-to-value compares how much you borrow with your property’s value. Many lenders go up to 85% LTV, subject to affordability and equity.

• Fixed vs variable: Fixed locks in monthly payments. Variable can move with the market - often lower to start, but payments may rise.

• Term length: Usually 3 to 30 years. Longer terms mean lower monthly payments but higher total interest.

• Arrangement, valuation, broker fees: Upfront costs that can add thousands over time. Check whether they are added to the loan or paid upfront.

• Early repayment charges: Fees for settling early or overpaying beyond an allowance. Policies vary by lender.

• Soft search eligibility: Pre-checks that do not affect your credit score, giving personalised quotes before a full application.

Your main routes to a secured loan

1. Direct with a lender: Apply to a bank or specialist lender such as United Trust Bank or M&S Bank. Direct applications give a clear line to the provider but limit comparison, and a full application may leave a hard search on your file.

2. Through a whole-of-market broker: Brokers like Kandoo compare multiple lenders, structure your case, and flag fees and conditions. This can improve fit and save time, particularly if your credit profile is complex or you need a higher LTV.

3. Comparison sites with eligibility checks: Use MoneySupermarket, MoneySavingAdvisors, or Compare the Market to get soft-search quotes tailored to your profile and borrowing needs. Shortlist the best APRC and fee combinations before you apply.

4. Your existing mortgage lender: Some homeowners explore further advances or second charge options via their mortgage provider. This can be convenient, but it is still essential to compare APRC, fees, and flexibility with external offers.

What it really costs - and why it matters

Who is likely to qualify

Lenders will focus on your property’s value and equity, your income and expenditure, and your credit history. Even though the loan is secured, a stronger credit score usually unlocks better pricing and terms. Expect affordability checks that verify regular income, existing credit commitments, and essential living costs to ensure repayments are sustainable. Your available equity and the requested LTV determine how much you can borrow, with many offers topping out around 85% LTV. If your credit file shows late payments or recent defaults, you may still obtain a secured loan, but rates could be higher and conditions tighter. Lenders also examine the purpose of funds and the suitability of either fixed or variable rates given your circumstances. If you plan to make overpayments or repay early, identify products with generous allowances and minimal early repayment charges so you are not penalised for good financial behaviour.

From quote to completion in clear steps

1. Check soft-search quotes with comparison tools to benchmark APRC.

2. Shortlist deals by rate, fees, term, and flexibility.

3. Gather documents - ID, income, statements, property details.

4. Submit a broker-backed application for stronger lender fit.

5. Valuation arranged and affordability fully assessed by lender.

6. Review final offer - rate, APRC, fees, and early repayment terms.

7. Sign documents and funds are released to your account.

Pros and cons worth weighing

What to watch before you sign

Resist the urge to chase the lowest APR and instead compare APRC across your shortlist. Scrutinise the fee schedule in full, including arrangement, valuation, and any broker fees, and calculate the cost both with fees paid upfront and with fees added to the loan. Stress test your budget against a higher payment if you are considering a variable rate. If you anticipate pay rises, bonuses, or lump sums, choose a product with fair overpayment allowances to shorten the term without penalties. Finally, review lender reputation. Service quality and complaint handling matter, because slow communication or inflexibility can turn a good rate into a poor experience.

Alternatives you should consider

1. Unsecured personal loan: Faster and no property risk, but typical rates run higher, often 5% to 35%+, and amounts are smaller with shorter terms.

2. Further advance or remortgage: Can be cost-effective if your mortgage rate is competitive, but remortgaging may reset terms and incur fees.

3. 0% purchase or balance transfer cards: Useful for smaller sums and disciplined repayment, but credit limits and promotional periods are limited.

4. Budget-first plan: Delay borrowing, build savings, or clear existing debts to improve eligibility and unlock lower secured rates later.

FAQs you will actually ask

Q: What secured loan rate is good in 2025? A: Competitive deals typically fall between 5.8% and 12.3% APR, though the market range spans 3.9% to 15%. Your credit score, LTV, term, and amount drive pricing.

Q: Should I compare APR or APRC? A: Use APRC for secured loans. It includes standard fees and reflects the real total cost, making comparisons fair and transparent.

Q: Do eligibility checks hurt my credit score? A: No. Soft-search tools from major UK comparison sites provide personalised quotes without affecting your score. A full application may leave a hard search.

Q: Fixed or variable - which is better? A: Fixed offers payment certainty that helps with budgeting. Variable may start lower and could fall, but payments can rise. Choose based on your risk tolerance.

Q: How much can I borrow against my home? A: Many lenders allow up to 85% LTV, subject to equity and affordability checks. The amount depends on your property value and income.

Q: Will poor credit be accepted? A: Often yes, but expect higher rates or stricter terms. Improving your credit can lower costs even with security in place.

Your next sensible move

Shortlist three to five offers using soft-search tools and compare the APRC, fee structure, and early repayment policy. If you want expert support, ask Kandoo to assess your profile against multiple lenders and structure an application that balances affordability, flexibility, and long-term cost.

Important information

This guide is for information only and is not financial advice. Secured borrowing uses your property as collateral. Always assess affordability and read lender documents carefully. Consider independent advice if you are unsure.