These are loans secured against property also known as homeowner loans. When you take a second charge loan it’s classed as a second charge mortgage and in terms of priority it will sit below your main mortgage.
A second charge loan enables you to use the equity in your property as a security. For instance, when you sell your property you clear your primary mortgage first, similarly you will have to pay off any second charge mortgage outstanding as this debt is also secured against your property.
Second charge is a very useful alternative to re-mortgage especially if you have a fixed rate mortgage with an early repayment charge or if you are on an interest only mortgage. It’s an option worth considering in case of an emergency when you need urgent access to funds but your credit file may not be in the best shape to apply for unsecured credit. Second charge may work out as a cheaper option than remortgage as you will not be paying a higher interest rate on your entire mortgage.