Get a £70,000 personal loan with the best rate

How do secured/homeowner loans work?

Lenders can mitigate their risk against borrowers falling into arrears by asking for personal assets to be put up as collateral. This is called a secured loan.

For personal loans as large as £70,000, lenders will likely only offer secured loans with a property put up as collateral. These loans, therefore, work in a similar way to a second mortgage, although there are no solicitors required. Lenders tend to be more lenient about who they’ll offer secured loans to compared to unsecured loans.

When organising this type of secured loan, lenders will arrange a telephone interview after you’ve submitted your online application. If you’re approved for a loan, you’ll be issued a formal offer, subject to a valuation of the property.

The valuation may require permission from your mortgage lenders and for someone to inspect your home. You can expect the entire application process to take around 3 weeks.

Choosing a lender

With a £70,000 loan, the difference between applying for the best available deal and the rest can make a significant impact on your monthly outgoings and the overall cost of borrowing. After all, you’ll most likely be paying interest on a sizeable amount of money for 10 years or more. A good broker can help you find the cheapest loan available to you.

The interest rates advertised are not the only factor that narrow down lenders, however. Below is a list of factors that play a role in defining the most suitable lender for your circumstances:

• Eligibility criteria. You should be able to find a lender’s basic eligibility criteria online. It may include the documents you need to provide, the type of employment and the minimum earnings/equity in your home. If you don’t meet this criteria, there’s little point in applying.
• Rate. The lender will advertise its “representative APR”, which is the rate that has to be offered to at least 51% of customers. However, if you’re deemed a particularly risky applicant, you might be offered a higher rate than this.
• Term length. Your loan repayments will be split over a set amount of months. Loans with longer terms will have lower monthly repayments but will cost you more overall due to extra interest charges.
• Fees. Most secured loans charge one-off arrangement fees paid at the start of the term. These can be bundled in with the loan amount and repaid over the same term.
• Maximum LTV. Lenders want to keep their lending relative to the property being used as security, so they consider the loan-to-value ratio and will always specify a maximum for this figure.
• Total payable. The amount of money you’ll pay over the entirety of the loan. This is the most important factor to consider.
• Early repayment terms. Typically, secured loans involve penalty fees when you repay any sums early.

Should I just remortgage?

Potentially. If you’ve built up more than £70,000 of equity in your home, then remortgaging could allow you to tap into that. Remortgaging can effectively act as an alternative to a personal loan and could work out cheaper, depending on current mortgage rates. In fact, many people might also prefer the simplicity of a single loan.

It generally makes sense to remortgage every couple of years anyway, whether that’s to a brand new mortgage provider or to a better product with your existing lender. This is because banks’ “standard variable rates” – which kick in after any introductory rates have finished – tend not to be competitive.

OK, so why might I not want to just remortgage?

If you’re currently enjoying a wonderfully low fixed rate on your mortgage, you may not want to disrupt it (and incur penalty fees in the process – although these can sometimes be worth shouldering). Similarly, if your credit record has taken a bit of a bruising since you took out your existing mortgage, and the rates you’re now being offered are significantly higher, then you may once again prefer to leave your existing mortgage alone.

Bear in mind that topping up your mortgage by £70,000 is likely to have a significant impact on your LTV (loan-to-value ratio), so the best mortgage rates on the market may be off the table.

Additionally, if remortgaging would mean that you end up paying off the £70,000 over 20 years, when you might otherwise have paid it off in, say, 10 years, then it could end up costing you significantly more overall.

You should aim to evaluate the overall costs of all your options to discover which is best for you. As a general rule of thumb (for any borrowing), aim for the loan that costs the least overall while offering monthly repayments you can afford.

See our full guide on remortgaging

The bottom line

A £70,000 personal loan could drastically change your everyday life if you successfully apply for one. Before you apply for any loan, ensure that you fulfil the specific criteria and are taking a loan out for a good reason – such as for home improvements or debt consolidation. Be aware that some lenders may require you to back your loan with collateral, such as your home.

Frequently asked questions

• How long can I expect the loan's term to be?

  Typically you choose a loan term that works for you. This might be anywhere from 1 to 25 years. Shorter loans usually cost less overall but have higher monthly repayments. To stand the best chance of your £70,000 loan application getting approved, you should consider your income and outgoings to get a sense of how much you could realistically afford to repay each month. In fact, this is what the lender will do when considering your application. A good rule of thumb is to opt for the shortest loan possible while ensuring the monthly repayments would be manageable.

• How can I boost the odds of being approved for a £70,000 loan?

  Lenders will check your bank statements and employment information to ensure you can comfortably afford your monthly repayments, so an income and outgoings that can accommodate the loan repayments comfortably will play a large part. If you have a decent amount of equity in your home and a stable job, this will also work in your favour. A sensible loan purpose is also important. Last but absolutely not least, you should get to know your credit file, which plays a huge role in determining your creditworthiness in prospective lenders’ eyes.

• Can I get a £70,000 loan with bad credit?

  It’s generally more difficult to be approved for loans when you have a low credit score. However, secured loans offer lenders the reassurance that they will get their money back if you defaulted on the loan. As such, having bad credit doesn’t mean that you can’t borrow £70,000, but you’ll likely be offered a higher rate of interest. Plus, while some lenders aren’t interested in lending to borrowers with bad credit, other lenders specialise in exactly this.