Borrowers considering applying for a secured loan will have numerous questions about the product. One of the most common is: Is being a homeowner an essential part of the eligibility criteria for a secured loan?
Secured loans are only accessible to homeowners, although a borrower does not necessarily always have to use their home as the collateral to secure the loan. Instead, they may secure the loan against a car or another high value asset, although some lenders may ask that a borrower’s home be used.
If borrowers do secure a loan against their home, this new borrowing sits on top of an existing mortgage agreement, meaning both need repaying, unless the borrower uses their secured loan to pay off their mortgage.