How Long Does It Take to Get a Secured Loan: A Complete Guide
Getting a secured loan is like putting together a puzzle. You know what the end picture should look like—extra funds at a lower interest rate.
Yet, there are many pieces you need to fit together first. It’s not instant; generally, it takes 2-3 weeks to gather all the pieces and complete the picture.
In this guide, we’ll help you sort those puzzle pieces faster. We’ll offer you tips to speed up each stage of your loan application, from paperwork to approval, so you can get the funds you need more quickly.
What is a Secured Loan?
When we talk about a secured loan, we mean a loan that’s tied to an asset, most commonly your home. That means if you default on your payments, you could lose that asset, so tread cautiously.
The upside? Secured loans often come with perks like lower interest rates and a bit more flexibility on the lending criteria. Even if your credit score isn’t stellar, the collateral (your property) can make lenders more willing to deal with you. You can usually borrow up to 95% of your home’s equity, provided you pass the lender’s checks.
To get the best interest rate and terms, it’s often wise to work with a broker who can scout out the best deals based on your specific situation.
How Long is the Waiting Game for a Secured Loan?
If you’re itching to get your hands on the loan money, prepare yourself for a little wait. A secured loan can take up to four weeks to materialise in your bank account. But there are instances where it’s done in a week. Here’s what usually happens:
- Get Consent from Your Mortgage Lender. Before you can proceed, you’ll need to make sure your mortgage lender is okay with you taking out another loan against your property.
- Find a Trustworthy Broker. This is the person who will act on your behalf during the application process.
- Initial Consultation. Discuss how much you want to borrow, the loan term, and what you can afford in terms of monthly repayments.
- Broker’s Investigation. They’ll find the best loan based on your credit history and personal needs.
- Decision Time. Once the broker has given you the options, it’s up to you to proceed or not.
- Document Verification. Submit all necessary documentation for verification.
- Property Valuation. The lender will evaluate your property to make sure their investment is secure.
- Contract Signing. Once everything is checked and verified, you’ll sign the contract.
- Funds Transfer. After signing, expect the loan amount to land in your bank within 24-48 hours.
Tips to Speed Up Your Secured Loan Application
The decision to take a secured loan is not a light one. But once you’ve decided it’s the right move, you’re naturally going to want to expedite the process. Here’s how:
Gather Your Documents Right Away
Your first move should be to gather all the necessary paperwork. This will likely include:
- Three months of bank statements
- Your latest mortgage statement
- Recent payslips or tax returns (if you’re self-employed)
- Current credit card balances
- Identification (passport, driver’s license)
- Proof of address (utility bill)
Most of the documents you require can be easily downloaded from your online banking portal, or obtained from your employer or mortgage provider. Having these documents saved on your computer means you can send them instantly to your lender, accelerating the process.
Be Honest and Transparent
When you apply for a secured loan, it’s crucial to be truthful. Skipping out on facts or altering numbers can backfire. Lenders thoroughly check each application, and dishonesty can cause delays or even accusations of fraud.
If you’re concerned about your credit history, remember that lenders tend to be more lenient with secured loans, as you’re providing an asset as collateral. But you still need to offer a reasonable explanation for any black marks on your credit report.
Fix Errors on Your Credit Profile
Before even starting the application, check your credit report. If it contains errors like incorrect late payment records or default claims, contact the concerned lender to correct them.
Be cautious about current market conditions and times when lenders might be extra sensitive, like during economic downturns or holidays. Applying during these periods might slow down the loan approval process.
Consult Your Current Mortgage Lender
If you’re considering a secured loan against your property, consult your current mortgage lender. They need to permit you to take out a new loan, as it affects them as well. Prepare evidence that you can manage your financial responsibilities.
Ensure you’ve calculated how much you can realistically borrow, taking into account your income and existing debts. This will help you approach lenders that match your needs, thus speeding up the approval process.
Respond Quickly to Lender Requests
Be prepared to answer any further queries or fulfil additional document requests from your lender swiftly. Delays on your end will simply extend the application process.
If possible, try to send your documents online rather than by post. Online submissions often speed up processing times.
Be Prepared for Valuation
Your property’s value will play a role in how much you can borrow. You might be lucky and only require a desktop valuation based on online data. But if a physical valuation is needed, be prepared for the delay it might cause.
To save time, avoid applying for a loan during public holidays, weekends, or periods like Christmas when fewer professionals are available to conduct valuations.
Avoid Last-Minute Changes
Once the wheels are in motion, try not to alter your loan details like the amount or repayment terms. Any changes will likely set your application back to square one.
Engaging a reputable secured loan broker can speed things up. They can help you submit your loan request to multiple lenders simultaneously, increasing your chances of approval.
By taking these steps and making use of the additional tips, you can effectively speed up your secured loan application and aim to get your money in four weeks or less.
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What Can Slow You Down?
After you apply, the lender will give you a ballpark figure of how long it should take to approve the loan. Here are some things that could slow down that timeline:
> Missing Documents. If the lender asks for more paperwork, it’s not because they love red tape. They need these documents to comply with regulations. Delaying this will only slow down your application.
> Sluggish Responses. Be quick to reply to any lender queries. If you make them wait, you’ll find yourself at the bottom of their to-do list.
> Property Valuation. If your loan is secured against your property, the lender will want to know how much it’s worth. Sometimes, an online “desktop valuation” is enough. But if that doesn’t work, you’ll need a real person to assess the property, which takes time.
> Changing Your Mind. If you change the loan amount or the repayment terms, you might have to start all over. This is why talking with a loan broker beforehand can help you make the right choices from the get-go.
By following these steps, you’re setting yourself up for a faster, smoother secured loan application process. So, get your documents in order, be honest, and stay proactive!
The Bottom Line
Getting a secured loan is a helpful way to access funds, but it takes time. You’ll spend weeks collecting papers, getting approval from your mortgage lender, and waiting for property assessments. However, the process can go more smoothly if you follow the tips we’ve shared.
A useful tip: team up with a loan broker. A broker can make things easier by finding you the best rates and simplifying the paperwork. This increases your chances of getting your loan quicker, freeing you up to focus on other things.
Ready to make your secured loan process faster and simpler? Fill out this quick form. We’ll connect you with a trusted loan broker who can find the right loan for you.
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Frequently Asked Questions
What is the fastest time I can expect my secured loan to be approved?
While some loans may be approved within a week, it generally takes between 2 to 4 weeks for a secured loan to be approved in the UK.
What additional fees should I expect during the loan process?
Expect possible fees like application charges, valuation costs, and broker fees. Make sure to ask for a comprehensive list of all fees upfront from your lender or broker.
Can I speed up the approval by choosing a specific lender?
Some lenders may offer faster approval times, but it’s essential to also consider interest rates, fees, and loan terms. Working with a loan broker can help you find the best balance between speed and loan conditions.
How can I assess the trustworthiness of a loan broker?
Check for customer reviews online and ask for recommendations from friends or family who have used loan brokers. You can also look for brokers who are registered with financial regulatory bodies.
Can I apply for a secured loan if I'm self-employed?
Yes, you can apply if you’re self-employed, but you’ll likely need to provide extra documentation, such as business tax returns or profit and loss statements, to prove your income.
Is it possible to have multiple secured loans?
Yes, it’s technically possible to have multiple secured loans, but this increases the risk for lenders. You may also face more stringent financial checks, which could slow down the approval process.
What happens if I miss a repayment?
Missing a payment can damage your credit score and may result in late fees. In extreme cases, you risk foreclosure on the asset tied to the loan
How do public holidays affect my loan approval timeline?
Public holidays may delay the loan process because many financial institutions are closed or operate with fewer people. This can slow down tasks like property valuation and document verification.
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