Are Secured Loans the Answer?

3:42 pm

Homeowners needing some spare cash are being attracted to secured loans as interest rates fall, despite the risks.
As personal loans and credit cards become harder to find with lenders being more selective, consumers are putting their properties up as security.
“There is no doubt that unsecured loan companies are tightening up their lending criteria, secured loans are becoming a very viable option as a result” says Tim Moss, head of loans and debt at comparison website Moneysupermarket.com
As with mortgages, failing to keep up with payments puts your property at risk of repossession.
Historically, secured loans were only available through brokers and were less popular as they were seen as a last resort for people with poor credit ratings. They also had higher rates.
However, secured loans with rates as low as 6.9 percent are now being offered direct to consumers by some companies.
“Loan brokers generally receive commission of between 2,500 pounds and 3,000 pounds per loan sold, so marketing secured loans directly to customers has allowed companies such as Fair & Square and Picture Loans to offer lower rates,” Moss says.
The terms have become easier to understand too. Neil Radley of secured loan provider Fair & Square says: “We recognise that people are often wary of secured lending, which is why we have been careful to make our loans as simple and