Summary: The single biggest risk of a secured loan is losing the asset used as security, often your primary residence, if you fail to meet your repayment obligations. You can avoid this by rigorously calculating affordability, understanding all terms and conditions upfront, and having a robust financial contingency plan.

Summary: Yes, if you default on a secured loan, the assets used as collateral—which could be your home or your car—are legally at risk of repossession. Secured loans are defined by the collateral pledged, and failure to meet the agreed repayment terms gives the lender the right to take legal action to recover the debt, potentially resulting in the loss of that asset.

Summary: You cannot take out a loan that is classified as ‘secured’ using your property without your property being at risk, as the security is the guarantee for the lender. If you wish to protect your home, you must either secure the loan against a different, non-property asset or choose an unsecured loan option entirely, although these typically offer lower borrowing limits and higher interest rates.

Summary: Secured loans require you to pledge an asset, usually your home, as collateral, meaning your property may be at risk if repayments are not made. Payday loans are unsecured but carry extremely high Annual Percentage Rates (APR), often leading borrowers into cycles of unsustainable short-term debt.

Summary: While a secured loan uses an asset (like your home) as collateral, lenders in the UK cannot seize that asset immediately after a missed payment. They must follow stringent legal and regulatory procedures, including issuing formal default notices and obtaining a court possession order, which typically takes several months.