Secured Loans see steady increase in demand

Wednesday, November 22nd, 2017

It is believed here at Caboodle Finance that secured loan advances in the UK (otherwise described as second charge lending) will continue to grow at a steady pace in 2018, just as it has throughout 2017, in our experience. Whilst the main reasons attributed to the ongoing demand for these secured loans are many and varied, below we briefly summarise some of what we understand are some of the most common reasons.

An attractive alternative to a re-mortgage?

During the nineties and noughties, interest rates for such products were in the main at double digits. Given the current competitive nature of the second charge market, when the lower rates now on offer are combined with more flexible lending criteria available through some lenders, some prospective borrowers view secured loans as an attractive alternative to a re-mortgage.

Avoid Early Repayment Charges

Additionally, as many now fix their main mortgage deal for longer, borrowers have also been utilising second charge loans in addition to further advances for capital raising to avoid paying the early repayment charges that would have applied had they considered a remortgage during that fixed rate period.

Secured Loans for Debt Consolidation

Historically, many secured loans have been for debt consolidation. This is likely to continue given that debt consolidation is not popular with some mainstream mortgage lenders and even more so now that the industry regulator has the matter under review.

Poor Credit History

Poor credit history can also be a reason people still look towards secured loans rather than a re-mortgage when raising capital. This is because any higher interest rate (based on a perceived increased risk for any new lender) would impact only the new or additional borrowing and not total indebtedness (which would apply on a consolidated re-mortgage).

What can a second charge loan be used for?

Generally, a second charge mortgage loan can be used for any legal purpose. The most popular reasons people use these types of loan are for credit consolidation and home improvements, however they can also be used for other things like paying a tax bill or raising the deposit for a buy to let property investment.

Furthermore, secured loans can be arranged using a buy to let investment property as the security; it does not always have to be the main residence.

Our team here at Caboodle Finance of Sutton Coldfield, Birmingham are here to advise you. If you would like to discuss your individual requirements or make a confidential, no obligation enquiry, call us today on 0121 308 9114 or alternatively click HERE to contact us.

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Your initial consultation is free and you are under no obligation to proceed with a mortgage we recommend. There will be a fee for mortgage advice. The exact fee will depend on your circumstances and may be reduced depending on the loan amount and any commission we receive from the lender. It is estimated that the fee will be £595, but it may range from £495 to 1% of the amount you borrow. The fee is only payable on completion and can normally be added to the mortgage. This will be discussed and agreed with you before you make an application. Please ask for a personalised illustration.

Secured loan rates from 3.95% APRC, although we have plans available up to 29.9% APRC which allow us to assist customers with the most severe credit problems. The overall cost for comparison is 7.65% APRC. For secured loans a broker fee up to 10% of the loan amount borrowed may be payable on successful completion. A lender fee may also apply. The actual APRC available will depend on your circumstances. All loans are subject to status. Please ask for a personalised illustration.

The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

Caboodle Financial Services Ltd, registered in England at Mere Green House, 46-48 Mere Green Road, Sutton Coldfield, West Midlands B75 5BT (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of PRIMIS Mortgage Network (PRIMIS), a trading name of Advance Mortgage Funding Ltd which is authorised and regulated by the Financial Conduct Authority. PRIMIS is only responsible for the service and quality of advice provided to you in relation to mortgages, protection insurance and general insurance products. Any other product or service offered by Caboodle Financial Services Ltd may not be the responsibility of PRIMIS and may also not be subject to regulation by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let.

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