What Is A Second Charge Loan?

Fluent Loans are a UK based finance broker providing tailored loans for people from a wide range of circumstances. Here they explain what a second charge loan is and how they might help you raise some cash.

If you wanted to raise some money to pay for home improvements, unexpected costs, a new car or once in a lifetime holiday, how would you do it?

For many people, the answer would be to take out a loan but you may not realise that there are lots of different kinds of loans you can choose from. If you’re a homeowner, a second charge loan could be an option for you.

What are second charge loans?

Second charge loans are popular for cash calls, when you want to secure a loan against your property. Unlike a remortgage loan, they are separate from any of your existing mortgage arrangements.

What are the benefits of a second charge loan?


Many people need to raise finance in a short time frame and choose to do so by securing a loan against their property, rather than taking out a personal loan. A second charge loan can be quicker to complete than a remortgage.


Second charge loans can be a low-cost way of obtaining a secured loan compared to remortgaging. Some mortgages have hefty redemption penalties if you try to remortgage to a new lender and set up costs for a new mortgage can also be significant and include new valuation, legal fees and the new lender’s arrangement fees. As a customer for a second charge loan, you have an option for no upfront costs. The costs can be added to the loan. However, you will need to liaise with your current lender if you secure a second charge against your property and they may impose restrictions.

Ease of approval

If you’ve had a change in circumstances since you took out your mortgage and your credit score has been adversely affected, you could struggle to secure a loan from a mainstream lender or face high rates on any credit. Becoming self-employed can also make it hard to borrow from your mortgage lender or to remortgage if you’ve made the move to self-employment over the last two years. On the other hand, second charge lenders may lend where a high street bank may not.

Protecting an interest only mortgage

If you are paying your mortgage on an interest only basis, borrowing more money can trigger a requirement that you switch to paying both the capital and interest, which can push up monthly costs considerably. With a second charge loan, because your existing mortgage isn’t touched, your lending terms shouldn’t change. Nevertheless, check with your primary lender beforehand to ensure there is no impact.

Is there a downside?

It is important to think carefully before using your property as security for a loan, as falling behind with payments could put your home at risk. A second charge loan is one way to consolidate existing borrowing and reduce monthly outgoings, but this could, however, increase your repayment term, and total amount payable.

Borrowing what you need without hurting your mortgage

A second charge loan allows you to raise the money you want, when you want and without you having to change mortgage lender through a remortgage. If you have a cheap mortgage, you want to stay on interest only, you need the extra cash quickly or your personal circumstances have changed or been variable since you took out your mortgage, a second charge loan could be exactly the option you need.

To find out more about second charge loans, please call 0800 047 4138     and speak to one of Fluent Money’s qualified advisers today. Alternatively, please enter your details on www.fluentmoney.co.uk/noddle and one of our team will be in touch.


The information in this piece is provided by Fluent Money Ltd. At Noddle, we do not give financial advice, and we accept no responsibility for any information or advice provided. We provide this service free of charge but may receive commission or payment from loan issuers for introductions.

Noddle is a Credit Broker and not a lender.