Borrowers opt for secured loans

by Gill Montia

Story link: Borrowers opt for secured loans

It would appear that UK consumers are shifting away from unsecured loans and opting for the secured variety, which offers more attractive interest rates.

According MoneyExpert.com, its website experienced and 85% increase in demand for secured loans in the three months to January 2008, when compared with the previous quarter.

Research conducted by the price comparison website shows that on an unsecured loan of £15,000 the average interest rate available stands at 5.9%, whereas for unsecured loans the average rate is 2.5% higher, at 8.44%.

Sean Gardner, Chief Executive of MoneyExpert.com, says: “Historically, secured loans were seen as something of a product of last resort. But these days they are far more attractive to homeowners who are looking for a competitive rate of interest.”

Adding: “The best secured loan deals are actually cheaper than the average unsecured loan. That coupled with the fact that one in three of us are worried about our ability to handle our debts means it’s an option that more and more people are now turning to.”