What is a secured loan?

With a secured loan, the money you borrow is typically ‘secured’ against something you own, and if you can’t afford to make repayments the lender ultimately has the right to take action to recover the money you owe them, sometimes by taking ownership of the personal property you put up as collateral.

Some secured lending is referred to as ‘homeowner loans’, as the money is usually secured against the borrower’s home. Some types of secured lending allow people to use other items such as cars –  known as a logbook loan.

Secured loans are typically used to borrow high amounts over a longer repayment period. Depending on the lender, and your own circumstances, this could be from something like £3,000 up to tens of thousands of pounds, or more, and potentially be paid over a period extending several years.

Interest rates for secured loans tend to be lower than for unsecured loans, as there is less risk for the lender because they can ultimately repossess the asset that the loan is secured against if the repayment terms aren’t met.

How does a secured loan work?

As with any loan, your individual circumstances will determine how much you’re able to borrow and for how long. Most lenders will make their decision based on your income, credit score, and the value of the item that you’re putting forward to secure the loan against.

If you are approved, you’ll typically make monthly repayments at either a fixed or variable interest rate. Depending on your agreement, there can be additional fees or charges for early or late repayments, so you should always make sure to familiarise yourself with these beforehand.

When you take out a secured loan, you’ll agree to hand over your personal property in the event you are unable to make the agreed repayments. Because of this it’s important to be confident you can afford to repay the amount over the length of time you agree upon. If you put your house up as collateral and fall behind you could be putting your home at risk of repossession.

Is a secured loan right for me?

If you need to borrow a large amount of money but think your credit history might affect your application, certain kinds of secured borrowing could be an option for you. Because lenders have a right to take control of the personal property you ‘secure’ the loan against if you fall behind on repayments, applicants who have a bad credit rating and need a loan may still have a chance of being approved.

Remember, this means if something unexpected happens and you’re unable to keep up with the terms you’ve agreed to, the lender has the right to seize those assets. Some lenders also have extra fees and penalties within their clauses, which can come as a surprise if you’re not careful.

How is a Satsuma loan different?

We know that customers don’t always want to borrow thousands of pounds, and that not everyone likes the idea of putting forward their personal property as security, or has the option to do so. If you don’t want to borrow large sums or take the risk of putting something like your home forward as security, a Satsuma short-term loan might be one possible alternative for you. However, we are a high interest lender in comparison to other lenders so please consider your options carefully.  

We offer short-term, unsecured loans from £100-£1,000, or up to £2,000 for existing customers, subject to affordability. You’ll have between 3-12 months to repay in monthly or weekly instalments.

With a Satsuma loan you’ll only pay back the amount you agree to upfront. You can use our loan calculator to work out how much you’d like to borrow, over a time period that suits you.

Check your eligibility before you apply

With Satsuma you can check your eligibility for our short term loan without affecting your credit score. You are not obliged to take out a loan with us after checking, however a full application requires a credit check thereafter.


How do I apply for a Satsuma Loan?

Before you get started, make sure you have the following:

  • Email address and mobile phone number.
  • Address history from the last three years.
  • Details for your income and outgoings.
  • Bank account and debit card details.


You must also meet the following criteria:

  • Aged 18-74.
  • UK resident.
  • Not be bankrupt.
  • Agree to a Satsuma Loans credit check.

What happens after I apply for a Satsuma Loan?

After you’ve decided how much you need to borrow, you need to fill in your information on the application form and pass an affordability and credit check.

Keep in mind that we base our credit checks on the loan you’re applying for, in addition to your regular incomings and outgoings.

From there, your monthly or weekly repayments will be automatically deducted from your debit card, through Continuous Payment Authority. We’ll only take payment on the day of the week or month you’ve agreed upon, so you don’t ever need to worry about any unexpected charges to your account.

If you have any concerns about missing a payment or you need to change your repayment day, simply get in touch with our friendly Customer Care Team who are happy to help. We’ll always talk you through your options, and never charge you for a late or missed payment.