- Secured on
- Your home, usually as a second charge
- Risk
- Repossession through the courts
- Lender duty
- Must treat customers in difficulty fairly
- First step
- Contact the lender early and get advice
On this page
What is a secured loan?
A secured loan is borrowing that gives the lender a charge over your home. It ranks behind your main mortgage. If you cannot pay, the lender can in the end ask a court for possession, so these debts are priority debts.
What happens if you fall behind
The lender will contact you, add charges and may start formal action. Before it can take possession, it must follow the courts’ pre-action steps for residential mortgages and secured loans, including trying to agree a plan with you. The court has discretion in many cases to delay or suspend possession if you can show a realistic plan to repay.
Talk to a free adviser first
An adviser can look at your whole budget, deal with creditors for you and explain which option suits you. Get free debt advice.
Help your lender might give
- Reducing payments for a period or extending the term.
- Adding arrears to the balance (capitalising them).
- Switching to interest-only for a time.
Tell the lender about any vulnerability, such as illness or disability, so they can take it into account.
Your options
- Agree a payment plan you can keep up with the lender. Do not promise more than you can afford.
- Ask whether you can refinance, move to a cheaper product or sell the home.
- Unsecured debts can be handled separately in a debt management plan or an IVA, while you keep up the secured loan. Bankruptcy puts your home at risk.
- Breathing Space can pause enforcement while you get advice, but you generally still have to keep up current payments.
See also our guide to mortgage arrears.
If you get court papers
Never ignore them. Respond by the deadline and go to the hearing. Free housing and debt advice may be available on the day, and you can ask for help before you go. Free advice from StepChange, Citizens Advice or MoneyHelper can prepare you.
Frequently asked questions
Can the lender take my home?
Yes, but only through the courts and as a last resort. The lender must follow a set process first.
What is a second charge?
A loan secured on your home that ranks behind your main mortgage. If the home is sold, the main mortgage is paid first.
Can I include a secured loan in an IVA?
Secured debts usually stay outside an IVA, so you have to keep paying them if you want to keep the home.
Can I sell my home instead?
Yes, and it can be a way to avoid possession. Speak to your lender and an adviser, as you may still owe money if the sale does not clear the debt.
Will a secured loan affect my credit file?
Yes. Missed payments and defaults can be recorded.
This guide gives general information and is not personal advice. Rules and limits change, so check with a free adviser before acting. Last reviewed 11 November 2026.