Demand for secure loans rises

Posted 2008-02-28

Secured loans are becoming more and more popular as borrowers hunt down the best deals in the market, MoneyExpert.com has claimed. While taking out a loan secured against your home has historically been regarded as somewhat of a last resort, the financial website said changing economic conditions have made the practice far more appealing. The average APR on a £15,000 unsecured loan is around 8.44 per cent, while people who are willing to put up their home as collateral typically enjoy rates closer to the six per cent mark. MoneyExpert.com chief executive Sean Gardner said that homeowners were increasingly concerned with securing the most competitive rate of interest - an indication that the credit crunch is beginning to sink its teeth into household expenditure. He cautioned, however, that people considering such loans should be sure to factor in the cost of arrangement fees, which can be as high as £995 and which do not normally apply on unsecured loans. Total secured lending on homes at the end of 2007 stood at £1,185 billion, according to debt charity Credit Action.

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