What is a secured loan?
This involves the loan being secured against a major asset - usually your home or, in some cases, another property. These are cheaper than unsecured loans but if you miss any payments there is a risk of losing your home. Secured loans are most common when the requirement is to borrow a large sum of money (from, for example, £10,000 upwards) over a long period of time (up to 25 years).

It is not necessary for you to own your home or property outright to secure the loan although you must have sufficient equity in the property to cover the amount borrowed. Note, also, that it is possible to have more than one loan or mortgage secured on your property (although all lenders must always be made aware of additional loans taken out against the property).

The secured loan gives lenders a degree of safety since, if the agreed repayments cease, the lender has a claim on the property as compensation. The risk of losing their home in this way makes some borrowers wary of secured loans. However, a lender will more often than not take a long-term view and allow some leeway if you run into temporary payment difficulties since he has the security of knowing the property is there as collateral.

There are definite benefits to applying for a secured loan - which, incidentally, is much easier to obtain than an unsecured loan which is generally only offered to people with a first-class credit record. The APR (annual percentage rate) is usually lower than on unsecured loans and there is more flexibility on repayment plans and terms.
Conventionally, loans are repaid through agreed monthly instalments. Flexible loans, which allow you to borrow and pay back at will, are more widely available than previously although interest is generally charged at a substantially higher rate.

When deciding between a secured loan and unsecured loan it is worth remembering that while unsecured loans are not tied to a house or property penalties for non-repayment will still be incurred.
A secured loan has several different features compared to an unsecured loan. A secured loan might be easier to obtain, even if you have an adverse or bad credit history. Mortgage arrears, payment defaults, even CCJs will not necessarily stop you from getting a secured loan, although the terms, particularly the interest rate, will reflect your financial history and present circumstances. If you have a good credit history, many lenders will offer secured loans of more than the equity in the property, sometimes up to 125%, so if your home has not increased in value as much as you had hoped, or a remortgage is not practical, a secured loan could offer you a better deal. 

With a Secured Loan you can borrow for any purpose, you can consolidate credit card and other debt to reduce monthly payments. Secured loans may be used to finance home improvements, purchase a new car, finance a wedding, cosmetic surgery, a business loan or a holiday.
Secured loans usually offer a much more flexible approach to credit problems.

What is an unsecured loan?
Unsecured loans are much riskier for the lender (since they are not secured against any asset) and therefore the credit history and financial circustances of the borrower become much more important, basically unless you have very good credit unsecured borrowing is not an option. However for those with no credit problems, unsecured borrowing can be a very cheap source of funds. The other main advantage is the speed of payout, i.e. the time it takes from completing loan application to actually recieving the funds in your bank. For an unsecured loan this can be completed significantly faster than in the case of secured borrowing.

What is a remortgage?
A remortgage is essentially changing your mortgage without moving your home.
The idea is that you switch your current mortgage to a new deal potentially reducing your outgoings. Alternatively they can be used to raise additional finances by releasing equity in your property. Your current deal does not have to ended for you to switch, though you should always be aware of any exit charges - you need to factor these in when looking at any new deal.

When you remortgage you are choosing to end your old mortgage scheme and switch to a new one. This normally involves switching your lender although you can sometimes change deals with your current provider. If you do remortgage with your current lender it normally involves changing your existing deal. You might for example change from a fixed rate deal to a variable rate deal if you thought interest rates were more likely to fall than rise.

Remortgages vs Secured Loans

Ultimately a remortgage is simply a special type of  secured loan. But which is best for you?

It comes down to your personal circumstances and your loan requirements. Some of the main factors that will influence which is best are as follows:

• The amount you want to borrow
• Your credit status
• How fast you need the funds

This table summarizes the main differences between an Unsecured Loan, a Secured Loan and a Remortgage:

(1) Ultimately failure to repay an unsecured loan could result in a "court charging order" that could see the repossession of your house.
(2) Will depend on an assessment of your credit rating, your ability to repay, and a valuation of your property.
(3) Will depend on an assessment of your credit rating, your ability to repay and the amount of "free equity" in your home.
(4) There may be other costs associated with exiting your existing mortgage, which you should take into account.