Pepper Money Secured Loan Review: Pros, Cons & Features
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Pepper secured loans: At a glance
Pepper offers a range of small to large homeowner loans for up to 95% of the equity in your home and to a maximum of £1 million, five times the amount some secured lenders allow. Fixed, tracker and discount rate homeowner loans are all available.
A homeowner loan is a type of secured loan that gets its name because a borrower must use their home as security for the loan they wish to take out. You will also see this type of loan referred to as a second charge mortgage. Importantly, using your home as security means it could be repossessed by the lender if you fail to make loan repayments when you should.
Partner SpotlightGet a quote without affecting your credit score.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a loan or any other debt secured on it.
Information for tenants
You must be a homeowner to apply for a Secured Loan via Norton
If you’re not a homeowner and would still like to search for a personal loan, then you can try searching for an unsecured loan via our loans eligibility service with Monevo.
Pepper Money Secured Loan
3 to 30 years
£5,000 to £1,000,000
95%
Fixed and Variable
- Minimum property value of £75,000
- Available to self-employed, employed, contractor income applicants
- Property must be in the UK and already have a first charge mortgage secured against it
- The loan must be secured on your primary residential address
This provider is available via our partner, Norton Finance.
Think carefully about securing debt on your home. Your home may be repossessed if you do not keep up repayments.
Consolidating multiple debts into one loan can extend the term of your borrowing and increase your cost of borrowing.
Important information: Neither our review nor star ratings considered lending rates, and therefore does not reflect how much it costs to borrow from these lenders. Always check and compare a lender’s rates against others on the market when considering a secured loan. The rate you are offered will be dependent on your circumstances, loan amount and term, and may differ from the advertised rate. If you have poor credit, only borrow if it is necessary and you can comfortably afford repayments.
Pepper secured loans pros & cons
Pros
- Fixed, variable and discounted rates are available.
- You can borrow up to 95% of equity, allowing you to access more funds.
- There is a low minimum loan amount.
- You can select from a range of loan terms.
Cons
- Borrowing 95% of the value of your home comes with increased risk to a borrower.
- It does not offer email replies as a part of its customer support.
The pros and cons featured here are chosen by us based on a combination of our expert opinions from our research of the secured loans market and an exclusive survey of UK consumers conducted on behalf of NerdWallet UK in February 2023 to identify the features of secured loans that people feel are most important. They are not the only product features and restrictions that you should consider. You should align them to your personal circumstances. Information was correct at the time of publication but may have changed since.
Pepper Money secured loans overview
The UK-based Pepper Money is part of the global Pepper Group, and offers a range of mortgage products to consumers, including standard mortgages and second charge secured homeowner loans.
Pepper homeowner loans are available for between £5,000 and £1 million, and all the way up to 95% loan to value (LTV). The repayment period, over which you can repay the loan, ranges from between three and 30 years.
| Loan amounts | £5,000 to £1 million |
| Term length | Three to 30 years |
| Maximum loan-to-value (LTV) | 95% LTV |
| Customer support | Phone, email (no email replies) |
| Trustpilot rating* | 4.7 stars (26 September 2024) |
* Rating relates to the Pepper Money UK brand rather than its homeowner loan product alone.
Where Pepper secured loans stand out
It offers high loan amounts
The £1 million that can be taken out through a Pepper homeowner loan is five times the maximum that some secured loan lenders offer. On the other hand, if you want a smaller loan, Pepper allows loans for as little as £5,000, one of the lowest minimum loan amounts available.
You can borrow up to 95% LTV
Though there is an increased risk involved in borrowing high amounts against the value of your property, Pepper Money allows loans to be taken out that are equivalent to 95% of the equity in your property. Other secured loan lenders tend to cap loan to values somewhere between 75% and 85%.
There is a broad range of repayment terms
Pepper Money’s window of repayment periods goes up to 30 years, whereas some lenders go no higher than 25 years. This gives borrowers the option to choose a longer term and keep their monthly payments low, though it’s important to remember that the longer it takes to repay a loan the more you’ll pay in interest overall.
It provides an interactive loan calculator
Pepper’s website includes an easy-to-use calculator that gives borrowers an idea of how much they may be able to borrow along with an indication of the total amount repayable, and the monthly repayment amounts, in certain scenarios. Perhaps surprisingly, this isn’t a tool that every lender provides.
Where Pepper secured loans fall short
Customer service options are limited
If you need to access Pepper customer service, you should call if your query is urgent. While it is possible to contact Pepper by email, you may have to wait up to five working days for a response, and this will either be through a phone call or a written letter, rather than an email reply.
» MORE: Compare best secured loans
What type of loans does Pepper Money offer?
Secured loans
Pepper Money offers secured loans in the form of a homeowner loan, which allows you to borrow funds using the equity in your home as security for the loan.
As you’re putting forward collateral for the loan, it may be possible to borrow larger sums, and potentially at lower interest rates, than you could through a personal loan which is unsecured, meaning that a high-value asset isn’t required for security.
However, the crucial thing to consider with a homeowner loan is that the lender has the option to repossess your home if you fail to make your loan repayments when you should.
How much you’re allowed to borrow will depend on the amount of equity you have in your home, your personal circumstances and the results of credit checks Pepper will carry out on you.
» MORE: What is a secured loan?
Secured loans for bad credit
Pepper Money says it welcomes applications from borrowers with low credit scores.
If you have bad credit, you may find it easier to take out a secured loan than an unsecured loan, due to lenders knowing they have your home as security to fall back on if repayments aren’t made as required.
However, it’s important not to apply for loans you’re unlikely to get because unsuccessful applications will have a negative effect on your credit score.
» MORE: Secured loans for bad credit
What can I use a Pepper Money secured loan for?
Pepper Money homeowner loans can be used for a number of reasons, including to:
- consolidate debt
- cover the cost of home improvements
- pay for school fees
- pay for a holiday or wedding
» MORE: Secured vs unsecured debt consolidation
Why do people take out secured loans?
People may look to a secured loan if the amount they want to borrow is more than they’re able to borrow through an unsecured personal loan. Others may find they have a better chance of getting a secured loan if they are struggling to get an unsecured loan, perhaps due to being self-employed or having a bad credit score.
» MORE: What are the differences between secured and unsecured loans?
Take a look at some of the other secured loan lenders we review.
Pepper secured loan eligibility criteria
To be eligible for a Pepper Money homeowner loan you need to own a home in the UK. The home the loan is secured against must be your main residential property – borrowing against a rental property is not permitted – and you must already have a first charge mortgage secured against it (this is the standard mortgage you use to buy a home).
If you want to apply for a Pepper homeowner loan, you must have a minimum property value of £75,000. Pepper welcomes loan applications from those who are employed, self-employed or a contractor, and have a less-than-perfect credit score.
Applications are considered on an individual basis, but Pepper will only lend to borrowers who it believes can afford to repay what they borrow.
» MORE: Should you take out a loan against your house?
Pepper Money secured loan features
Rates
Pepper Money offers fixed-rate, variable rate and discounted homeowner loans.
With a variable rate loan, there is the potential for your monthly repayments to rise and fall. Alternatively, a fixed-rate loan offers certainty over your monthly repayments for the duration of the fixed-rate period. However, once this period expires, if you don’t apply for another deal, you’ll switch over to the variable rate option.
A discounted secured loan offers a discount off the lender’s standard variable rate for a certain length of time, after which you switch over to the lender’s normal standard variable rate.
Pepper’s website includes an easy-to-use calculator that gives borrowers an indication of the interest rates that are currently on offer and the monthly repayment amounts these could result in.
However, the final rate you’re offered will always depend on your personal circumstances.
» MORE: How are fixed and variable mortgages different?
Loan-to-value ratios
With a Pepper homeowner loan, it is possible to borrow up to 95% of the value of your property, minus any outstanding mortgage balance that remains on the property. There is an increased risk involved with borrowing a high proportion of your property value. While it could allow you to borrow a larger amount than would be possible through other lenders you should consider very carefully the impact this could have if your financial circumstances change, or property values drop.
Making overpayments
Pepper allows penalty-free overpayments on its homeowner loans. Overpaying could enable you to lower your future monthly repayments or to shorten the term of your loan, though you should always check the terms and conditions of your specific loan before paying extra as there may be a cap on overpayment amounts.
Paying off a loan early
It is possible to pay off a Pepper homeowner loan in full early but, depending on your particular loan, you may need to pay a charge for doing so. Details of any early repayment charge will be included in your loan offer document or loan agreement, or you can call Pepper Money to check if you’re unsure.
Customer support
In terms of customer support, Pepper Money welcomes enquiries over the phone or by email, though speaking to customer service over the phone is the suggested method of enquiry if you need a quick response. If you send an email, Pepper says it will respond either by phone or written letter (so not by email) and it could take up to five working days for it to reply.
Customer ratings
Pepper Money receives an overall rating of 4.7 stars out of five from more than 1,300 customer reviews on Trustpilot – a score that the review site equates to ‘Excellent’. Almost nine in 10 reviewers award the lender the full five stars.
While the score reflects all the products and services offered by Pepper Money in the UK, and not solely its homeowner loan product, it still represents a positive for any prospective borrowers.
This information was correct as of 26 September 2024.
How can I apply to Pepper Money?
You can only apply for a Pepper homeowner loan through a broker. There is a list of trusted broker partners on the Pepper Money website.
The advantage of using a broker is that they can recommend a suitable loan and help guide you through the application process.
What information do I need?
When applying for a homeowner loan you should usually be prepared to share:
- proof of your address and identity (a utility bill or bank statement and/or your driving licence or passport will usually suffice)
- recent payslips or a P60 if you’re employed
- self-assessment forms or SA302s if you’re self-employed
- proof of any other income you receive from pensions or benefits
- your latest annual mortgage statement
- information relating to any outstanding debts
- recent bank statements showing your income and expenditure
How long does it take to apply?
Pepper says getting a homeowner loan can take anywhere between a few working days and a few weeks from start to finish.
Pepper Money FAQs
Pepper Money is part of the Pepper Group which operates globally, including in Europe, Asia and the Pacific regions. The group was acquired by the US private equity firm KKR & Co Incorporated in 2017.
Pepper Money is regulated and authorised by the Financial Conduct Authority, the financial services regulator in the UK.
Help if you’re struggling with debt
Late repayments can cause you serious money problems. Consolidating multiple debts into one loan can extend the term of your borrowing and increase your cost of borrowing
If you are struggling with debt, you can seek advice from a debt advice service, such as:
- Citizens Advice
- MoneyHelper (formerly The Money Advice Service)
- National Debtline
- StepChange
- The Money Charity
Think carefully about securing debt on your home. Your home may be repossessed if you do not keep up repayments.
Late repayments can cause you serious money problems.
Consolidating multiple debts into one loan can extend the term of your borrowing and increase your cost of borrowing.
Review methodology
At NerdWallet UK, we base our reviews and our ‘Best’ pages on the results of surveys we undertook about what was important to people who use these products. This allows us to look at products impartially of any commercial arrangements we have and fairly rate the products on the same set of criteria.
Best means our ‘Best’ and is based only on what products we have aligned to our surveys, which form the basis of our reviews and ratings. This means that there will be other products on the market that we have not included in our ‘Best’ pages. Best does not mean it’s best for you, nor does it mean the ‘cheapest’.
Our reviews may display lenders’ rates. This additional information has not been included in our evaluations but is still very important when choosing a product. Rates offered can depend on circumstances, amount and term. Always check details before proceeding with any financial product.
Product details reflect the information that was available at that time but may have changed since. We strive to give you a review on as many products as possible, but there will be products not included on the market. The review is our opinion, but it does not constitute advice, recommendation or suitability for your financial circumstances.
While we try to provide you with accurate information, the providers can change the terms of their products at any time, therefore it is advisable to check the terms before you proceed.
You can view our full review methodology here.
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