Watch Out

Watch out before putting your loan on the house. The vast majority of bank loans are known as ‘unsecured’ lending. The alternative is to go for secured lending – with your house normally used as security on the loan. This can bring lower interest rates because the lender knows it will get something back if you default. But putting your home at risk in order to shave a few points off your loan interest can be a step too far. So think carefully before taking this chance, especially as the most expensive ‘second charge’ or ‘secured’ loans are actually worse value than the best-buy unsecured deals.