You might find yourself in a situation where you’re looking to raise extra funds, perhaps for home improvements, consolidating debt, putting down a property deposit, or financing another goal. You’re ready to move forward, but you’re unsure where to start. If you’re aiming for a £50,000 loan, there are several routes you could explore.
What are my options for raising a £50,000 loan?
£50,000 is a large amount, and it’s natural to wonder whether this is accessible and where to find it. Larger sums can limit the types of borrowing available (like personal loans or credit cards), but there are still solutions worth considering.
Remortgaging
One option is to remortgage your home. This means switching your current mortgage to a new one, usually with a different lender, and borrowing extra at the same time. The new mortgage pays off your old one, and the extra money is given to you as a lump sum.
Because the loan is still secured against your home, interest rates can often be lower than other types of borrowing, but you’ll still need to meet the lender’s checks.
When might this be a good choice?
Remortgaging for £50,000 might work if:
- You can get a better interest rate than your current mortgage.
- Your fixed or tracker deal is ending and you want to borrow extra at the same time.
- You want just one mortgage payment instead of separate loans.
Things to think about
If your current mortgage has early repayment charges, switching early could be expensive. Also, extending your mortgage term might lower your monthly payments, but you could pay more interest overall.
Secured loans
Another common option is a secured loan, also known as a second charge mortgage or homeowner loan. These loans are also secured against your property, but it is a separate loan to your first mortgage. Because of this collateral, lenders are often more willing to offer larger amounts (sometimes up to £1 million).
The risk is that if you fail to keep up with repayments, the lender could repossess the property used as security, just as with a standard mortgage.
What will lenders look at?
Lenders will still assess:
- Your income to make sure the loan is affordable.
- Your credit score and history to understand your repayment track record.
- Your equity, which is the difference between your home’s value and your current mortgage balance. The more equity you have, the more borrowing options you may have available.
When could this be the right option?
You might consider this option if:
- You’ve reached your borrowing limit with your existing mortgage lender and are unable to get a further advance.
- Remortgaging isn’t appealing because you’d lose a good interest rate or face high early repayment charges.
Summary
Borrowing £50,000 is a big decision, but there are ways to make it happen. Remortgaging could work if you want one payment and you are coming to the end of your current deal. A secured loan might be better if remortgaging isn’t right or would be too expensive.
Whatever you choose, make sure the repayments are affordable and remember that both options are secured against your home. Getting advice from an expert can help you understand the costs and pick the option that works best for you.
Loans are secured against property. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
