The UK Secured Loans market is enjoying strong growth recently as many new lenders have entered the market providing borrowers with many competing options, even secured loans for bad credit borrowers. Among the most popular Lenders are names such as Blemain, Nemo, Prestige, Jigsaw and Tiuta; they may not all be household names yet like many of the high street lenders but their influence is certainly growing.
So, why are secured loans so much in demand of late? There are many reasons: Firstly the tightness in the mortgage market has meant mortgage lenders are not as keen to offer finance as before. Secondly, even if they are eligible for one, many people find themselves on competitive tracker rates and don’t want to remortgage and lose that deal. Finally too we note that the regulation in the Secured Loan market is lighter thereby making transactions easier. All these factors have contributed to the rise in popularity of the UK secured loans market.
What does one need to know before borrowing in this market? A key point to note is that the best secured loans are not always the cheapest secured loans. Terms vary across lenders and what may appear cheap up front could have some painful Early Repayment Charges. These could come into play if your circumstances change and want to complete the loan before its natural term. Watch out too for Lender fees that could substantially change the APR on a loan, especially if it is over a shorter term. As with all things financial finding a reliable broker to advise you will likely pay you in the long term.
One of the most popular uses for this market is providing secured loans for bad credit borrowers. If someone with a less than perfect credit record needs to borrow but is not eligible for an unsecured loan, if they have equity in their property there will likely be a secured loan available to them which will both finance their requirement and provide them with an opportunity to rebuild their credit rating.
Very often such loans aren’t the cheapest secured loans available but if the borrower maintains payments for, say, a year they can then switch to a better rate or may be eligible for a remortgage or an unsecured loan. In the long term, the best secured loan for them may well be the one with a high interest rate (albeit the only one available to them at the time).
Going for the best secured loans in the UK requires some effort. You could search yourself using Google and a secured loans calculator to find the best deal but in our opinion your time is best saved by asking a broker to find you the cheapest secured loans and deciding which terms suit you best from there. Yes, they will charge you a fee but this is justified if it prevents you from making the expensive mistake of tying yourself into an inflexible and expensive repayment plan. In the long run, that’s surely worth it!
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