How to Compare Secured Loan Lenders: The Complete Guide

The four credit tiers of UK secured loan lending

The UK second charge market sorts broadly into four credit tiers. Understanding which tier your profile fits is the single most important step in selecting the right lender, because each tier has different specialists, different pricing and different criteria flexibility.

Prime: clean credit, simple income, standard property. Key lenders: Shawbrook, Aldermore, United Trust Bank, Paragon Bank. Rates from 7.5% to 9% APRC for the best cases.

Near-prime: minor credit blips (satisfied CCJs, historic defaults), complex income (self-employed, contract, limited company), specialist property. Key lenders: Pepper Money, Precise Mortgages, Clearly Loans, Norton Home Loans. Rates from 8.5% to 12% APRC.

Adverse: recent defaults, active DMPs, discharged IVAs, heavier credit issues. Key lenders: Bluestone, Central Trust, Evolution Money, Spring Finance. Rates from 11% to 18% APRC.

Specialist: unusual property, older borrowers, heavier adverse combined with complex property. Key lenders: Together Money, Equifinance. Rates from 10% to 20% APRC depending on case.

Attempting to price your case at the wrong tier — pushing a near-prime case into a prime lender, for example — usually results in decline after a wasted hard search. The skill of a specialist broker is accurately positioning the case at the outset.

Pricing structure: APRC, fees and total amount payable

Headline APRC is regulated under the FCA’s MCOB rules and includes both the interest rate and mandatory fees spread across the term. But the way APRC is calculated can obscure real cost differences. Always look at total amount payable over the chosen term — this number is on your ESIS and reflects every pound you will pay to settle the loan in full.

Arrangement fees typically range from 1.5% to 5% of the loan advance and can often be added to the loan (increasing the balance). A 5% fee on £50,000 is £2,500 added to the starting balance, which compounds with interest for the full term. Compare like for like: a lender at 9% APRC with a 5% fee may actually cost more than a lender at 10% with a 2% fee.

Here is an illustrative comparison on a £40,000 loan over 15 years:

Over 15 years, the difference between prime and adverse pricing is £22,500 on the same £40,000 loan.

CLTV, age limits and term flexibility

Combined loan-to-value (CLTV) caps vary materially across lenders. Prime lenders typically cap at 75% CLTV on the cleanest cases, stepping down to 65% or 70% for complex income. Near-prime and adverse specialists often cap tighter — 70% to 75%. Together Money uniquely offers up to 80% CLTV across most tiers, making it a go-to option for higher-LTV cases.

Age limits vary enormously. Mainstream prime lenders typically cap at 70 to 75 at end of term. Retirement-friendly lenders — Together Money, Equifinance, Spring Finance — extend to 85 or even 90 at term end with appropriate exit strategies. For borrowers over 65, this age flexibility can be the deciding criterion.

Term flexibility runs from 3 to 30 years across the market. Longer terms reduce monthly payment but massively increase total interest. For debt consolidation cases, the right term is usually the shortest you can afford — not the longest. A 15-year term on £30,000 at 10% APRC costs £28,000 more in total interest than a 10-year term, despite a lower monthly payment.

Property type acceptance across lenders

Property type is one of the most common deal-breakers and varies significantly across lenders:

• Standard construction houses and flats: accepted by all lenders.
• Ex-local authority houses: accepted by most; valuer comment required.
• Ex-local authority flats: tighter — low-rise usually fine, high-rise restricted.
• Non-standard construction (concrete, steel frame, timber pre-1975): restricted — Together and Equifinance most flexible.
• Thatched roof: limited appetite, Together and some specialists only.
• Flats in cladding-affected buildings: EWS1 may be required; many lenders restrict.
• Short lease (under 70 years): most lenders decline; extension required.
• Above commercial premises: restricted based on type of commercial (takeaway, launderette often declined).
• BTL: specialist lenders only — InterBay, Paragon, Shawbrook, Aldermore, Precise.
• HMOs and MUFBs: InterBay, Paragon, Foundation.

A pre-application call with your broker to confirm property acceptance can save a wasted valuation fee.

Income evidence and self-employed flexibility

How lenders treat different income types is one of the biggest differentiators:

• PAYE employed: universally accepted; 3 months’ payslips standard.
• Self-employed sole trader: SA302 and tax year overview; 1 year minimum at most lenders, 2 years preferred at prime.
• Limited company director: salary plus dividends; some lenders add back retained profit with accountant’s letter.
• Contract income (day rate, PSC): 6 months’ track record typical; Aldermore, UTB and Precise flexible.
• Retired pensioners: pension evidence; some lenders accept up to 85 at term end.
• Rental income from BTL: stress-tested at ICR; specialist lenders only for BTL second charge.
• Multiple income streams: combined acceptance varies; Bluestone and Pepper flexible.
• State benefits: some lenders accept carer’s allowance, DLA, PIP alongside earned income; tax credits generally accepted.

Self-employed borrowers benefit most from whole-of-market comparison because lender methodology varies widely.

ERCs, overpayment flexibility and product structure

Early repayment charges (ERCs) typically apply for 3 to 5 years at the start of the loan, tapering over the period. ERCs matter when you expect to sell, remortgage or refinance mid-term. A typical ERC schedule:

Overpayment flexibility varies. Many prime lenders allow 10% of balance per year without penalty; some adverse lenders restrict overpayments entirely during the ERC period. If you anticipate lump sum overpayments, confirm the overpayment allowance before committing. Payment holiday provisions, term extension flexibility and porting rights (generally limited on second charges) are all worth confirming at application.

Product structure also varies between capital and interest, part-interest-only and full interest-only. Owner-occupier second charges are almost always C&I. BTL second charges are often interest-only. Part-and-part structures exist on some specialist products.

Regulatory status and consumer protections

Not all secured lending is created equal in regulatory terms:

• Regulated second charge mortgages: MCOB applies in full. ESIS, 7-day reflection, affordability stress, FOS access, forbearance under MCOB 13, Consumer Duty outcomes. This covers owner-occupier and consumer BTL.
• Unregulated commercial BTL: commercial lending, no MCOB, no reflection period, no FOS access for the borrower. Limited company and professional landlord BTL typically falls here.
• Bank lenders: PRA-regulated (Shawbrook, Aldermore, Paragon, UTB). Prudential capital and liquidity oversight. FSCS protects deposits up to £85,000.
• Non-bank specialist lenders: FCA-regulated (Pepper, Bluestone, Central Trust, Evolution, Together, Equifinance). No PRA supervision. FSCS does not protect the loan.

For a long-term (15+ year) loan, lender regulatory status matters. A PRA-regulated bank is less likely to fail or exit the market than a non-bank specialist. The difference is material for portfolio landlords and large loans.

Using a broker vs direct application

The UK second charge market is overwhelmingly broker-distributed. Very few lenders offer direct-to-consumer application for secured loans — this is by design, because FCA Consumer Duty rules make broker-mediated comparison the best way to deliver good outcomes. A whole-of-market broker will:

• Run soft-footprint decision in principle across multiple lenders simultaneously.
• Compare APRC, fees, CLTV, criteria fit and completion likelihood.
• Document the rationale for the recommended lender.
• Manage the valuation, first charge consent and legal process.
• Disclose all fees upfront under Consumer Duty.

Broker fees typically range from 0% (where the lender procuration fee is sufficient) to 2% of the advance, disclosed in advance. In exchange, the broker delivers lender comparison, case management and regulatory compliance. For all but the simplest cases, using a broker delivers better outcomes than attempting to approach lenders directly.