The recent crisis in the US sub-prime market and the global credit crunch has made lenders tighten their belts and made borrowing harder for everyone – and there may be harder times yet to come. Banks are understandably nervy about making bad loans, and for the average consumer looking to pay for that long-awaited Caribbean cruise or finance that innovative business venture, this is likely to have an increasingly restrictive knock-on effect. And if you're a would-be borrower with a less than perfect credit history, getting credit in today's financial climate might seem like an all but impossible prospect.

Financial gurus have sometimes warned prospective borrowers away from secured (as opposed to unsecured) loans. That's because, they say, the ‘security' involved isn't for you, the borrower – it's for the lender. After all, in a worst-case scenario, you could lose your home or business. While this is all true – and, as with any debt, you should think seriously before taking out a loan against the value of your property – in today's credit market more borrowers are likely to find secured loans the best way of getting their hands on some much-needed cash. So it's important to realise that, when undertaken responsibly, a secured loan needn't be something to be afraid of.

First of all it's important to be clear about what, exactly, a secured loan is. Basically, it's a sum of money lent to you against the value of your house. That's why it's a safer bet for the lender, and that's why it's much easier to obtain credit quickly than with other kinds of loans – in some cases up to 125% of the value of your property. And while it might sound a lot like a remortgage, there are a number of reasons why this kind of borrowing can be more attractive than remortgaging your house. For starters, with a secured loan you can get your hands on your money much quicker than with a remortgage – sometimes within three or four weeks of applying. And unlike with a mortgage, the money is yours to spend on anything you like, which means more freedom to ride out difficult times or treat yourself to a break.

Increasing house prices in recent years may mean that now is a better time than ever for homeowners to capitalise on some of the value locked into their properties. Once you've checked what's on offer and made sure that you can afford repayments, you're ready to apply for a secured loan. But how much will it cost? The rate depends on a number of factors: the size and length of the loan, your credit score and the amount of free equity in your home. Different lenders calculate these differently, so it's important to shop around. If you have a relatively clean credit history but less equity, you might find a different company suitable than someone who has poor credit history but high equity. You should also consider taking out insurance on the loan, in case you're unable to keep up repayments due to illness or unexpected unemployment.

So what's the downside, and why have secured loans gained a gloomy reputation? Most secured loans have very strict repayment rules, meaning that if you come into some money there are penalties for repaying early. And the reduction in monthly outflow can in some cases encourage borrowers to take on more debt. But as with all credit ventured, planning is key. If the loan is managed responsibly, it can spread repayments over a much longer period than other types of borrowing, reducing outflow and freeing up cash for the good things in life.

Many borrowers will increasingly find secured loans their best option now that world financial markets are experiencing a downturn and credit is becoming scarcer. But it needn't be seen as a last resort. After all, the current scarcity of credit is partly a result of borrowers taking on unsecured debts they could never hope to pay back. We're sometimes encouraged to think of lenders as the bad guys in all of this, snaring naive prospective borrowers with pie-in-the-sky offers of financial freedom and leading them up the garden path of financial ruin. Reality is not so simple. After all, a bad debt is a bad debt for both the borrower and the lender. If some companies have been too quick to hand out credit in the past, they're sure to learn from their mistakes as credit becomes scarcer. All this means that the moment for the secured loan has arrived. When undertaken sensibly, there's no easier way of freeing up cashflow from your property or business while guaranteeing your ability to cover the cost of the venture. And it's worth bearing in mind that, in a globalised credit market, more secure borrowing means more security for all of us.