What Documents Do I Need For a Secured Loan?

If you’d like to borrow a large sum of money and own equity in your property, applying for a secured loan can be a wise decision. These loans often have lower interest rates than personal loans, as you offer your property security.

Having the right documents ready can make a massive difference when navigating the application process. Working with Believe Money means you’ll have a dedicated broker in your corner, but it’s always good to know which documents you need.

While lenders often have varying requirements for applicants, the following documents are usually essential:

• Identification: Most lenders ask to see your passport, but many will also accept a driver’s license or another form of photographic identification.
• Proof of Address: Accepted documents include your mortgage statement, council tax bill, any credit card or loan statements and utility bills. However, the lender probably won’t accept your mobile phone bill.
• Home Ownership: Secured lenders offer lower interest rates and extended repayment terms when you provide your home as security. For this reason, they’ll want to see proof of your mortgage and ownership status, including how much equity you have. Many will perform an online check, but they might also ask to see your mortgage statement.
• Employment Status & Income Proof: Full-time employees can use their contracts and payslips as proof of income, while self-employed individuals should download their SA302 (tax calculation) from the HMRC website.

The main benefit of secured loans is that they don’t rely on your credit score. While many people with less than good scores fail to obtain unsecured loans, your equity is the most important factor secured lenders take into account.

However, your credit report is still an important part of the application process. It highlights your borrowing history and whether you’ve defaulted on loans or credit cards before.

Most lenders will let you know if they plan to review your credit history, and they might ask you to provide proof of any outstanding debt. Remember, bad credit won’t automatically rule you out of obtaining a secured loan, but it can impact the amount you’re able to borrow and the lender’s repayment terms.

As part of the secured loan process, your lender will reach out to your existing mortgage company and ask for permission. The consent to a second charge letter gives the mortgage company a chance to either approve or refuse your application.

Common reasons for refusal include when there’s a history of defaulting on your mortgage repayments or if the company is unhappy with your previous conduct.

When getting a secured loan, the lender might ask for other information, although it depends on the company you choose. Being able to provide the following details will speed your application up:

• Age Verification: Your age might define your repayment period, as most lenders want applicants to repay the loan in full before retirement. For example, a 35-year-old is more likely to receive 30-year loan repayments than a 40-year-old.
• Property Valuation: Lenders will also want to see how much your property is worth to assess whether it’s a valuable asset. A property survey or online valuation is usually sufficient, but changing markets or homes in low-demand areas might impact your loan options.
• Your Expenses: Some secured loan providers might ask to see your bank statements as they outline any ongoing expenses. If your monthly income barely covers these outgoings, borrowing money might not be an option – unless you’re using the loan for debt consolidation.
• Business Plan: Self-employed individuals may also need to provide their lender with a business plan detailing forecasted profits and contingency plans.

While applying for a secured loan involves providing documentation and outlining your existing financial commitments, planning can speed up your application. Working with Believe Money gives you access to a team of dedicated brokers who will support you throughout the application.

Our brokers will help you collect the documentation needed for a secured loan early, reducing barriers. Please get in touch with us today and begin your application.