Borrowing money is a popular subject amongst the 25-45 age range in the UK. Cementing careers and permanent home stays requires a degree of financial backing, and desperate would-be business owners, refused by banks, often go to secured loans companies to try and get a good deal. But what are the different options available for the secured loan borrower, and what are the dangers and pitfalls involved in borrowing against something? This article will explore the subject in a depth that will allow the reader to make an informed decision and hopefully get the best loan for them.

Firstly, it should be made clear what a secured loan exactly is. Far from being the evil monstrosity that some financial advisers would have it out to be, a secured loan is essentially just a form of guaranteeing your lender a degree of financial returns should you find yourself in a financial situation that doesn't allow you to keep up with loan repayments. You can choose anything of value to be put up against your loan, although most borrowers will generally choose their house or workspace: probably the single most valuable item that most people own. Secured loans vary in amounts – usually, banks loan from £2000 to £25000, depending on a host of outside factors including personal circumstances, credit history and an outline of what the money will be spent on. Beware successful loan takers: there is sometimes a penalty imposed for early repayment. This is to stop astute consumers paying off the loan quickly and avoiding the subsequent interest repayments. If you do anticipate having the money to pay back the loan quickly, either take out a loan with no charges for early repayment (these will undoubtedly have higher interest rates) or set up a high-interest bank account with which to fund repayments. This will both keep the money in a safe and secure place where you will not be tempted to spend it, as well as off-setting some of the bank's interest charges with the high interest given to you by having a large amount of cash in the account.

The concept of ‘interest' is an important one in the arena of secured loans. The banks Annual Percentage Rate, or APR, is a percentage of the loan that is added to your debt every year that the loan is still outstanding. Many consumers check the different APR rates to compare loans between different banks and to try and make the best decision. In fact, the APR still has a degree of movement in it, and the rate you see on the paper may well not be the actual rate offered: consumers with favourable credit histories will find themselves offered a much better rate than some of their less financially-savvy counterparts. However, the latter do have the benefit of actually being able to get a loan: lenders are far more likely to give money to less-than-trustworthy individuals if they have a valuable asset waiting if the borrower does default on the repayments.

Actually applying for the secured loan is fairly straightforward, and the consumer is offered a multitude of options: internet applications; those made by telephone and even post are all standard, tried and tested ways of obtaining a secured loan. Whilst preliminary assessment is made quickly, any loans under the value of £25000 are strictly monitored. A weeklong assessment period is granted to the consumer to make sure they are fully aware of the credit agreement they are entering into, and to provide them with a means of stopping the loan if they so desire. This is certainly a useful policy for anyone who is unsure of the results of taking out a loan – the implications of such might only become realised after the (sometimes) stressful and arduous application process has been completed.

Consumers are often not aware just how much their credit rating/score affects their chances of getting a good loan. Credit history companies provide the potential lender with a complete and detailed history of the borrower's financial background: the heavy student debt you built up in your formative years could come back to haunt you. If you're unsure about your credit history, get a full account from such a company for a small fee. It'll allow you to dispute any claims against your person that you decide to be unfair, and also allow you to decide upon a suitable course of attack when applying for a secured loan.