Secured loans may aid credit woes

Video transcript

Borrowing on credit cards has hit its highest level for five years, but if your borrowing gets on top of you, you could regain control of your finances by refinancing through personal loans, secured loans or even a remortgage.

The British Bankers Association (BBA) has indicated that as a nation, we made close to 200 million card purchases during March this year, totalling nearly £12 billion. These figures are 13 per cent and eight per cent higher than the same point in 2013.

There`s nothing wrong with spending on credit cards, as long as you are comfortable with keeping up repayments, but with credit now being more widely available, people who are less able to pay it off may find themselves racking up an increasing debt which they cannot get back down.

Analysts reckon that building an economy based on consumer borrowing isn`t sustainable and while that might not seem important to many of us, a failing economy could lead to a return to recession, fewer jobs and finding it harder to pay off our bills.

If you`re having trouble paying off what you owe already and cannot make cut backs on other areas or use savings to get back in control of your cash flow, now could be the time to think about secured loans. These can help homeowners and mortgage payers to pay off a group of smaller, unsecured loans like credit cards, store cards and car finance, leaving you with a single, smaller repayment to make each month.

While that will mean you`ll be spending less month-on-month, you will probably pay more in interest, as the new loan may be for a longer period than your existing ones. Secured loans are secured on your home and therefore carry similar risk to a mortgage if you do not keep up repayments. Weigh up your options thoroughly before taking on any form of secured debt.

To chat through your secured loan or remortgage options enquire at firstchoicefinance.co.uk or call us on your mobile on 0333 003 1505 or 0800 298 3000 from a landline.

Quick Secured Loans

First Choice Finance, the place to start your search for your fastest secured loan requirements. Looking for more information on how to get quick, secured loans but don`t know whom to ask? Why not take advantage of our expert knowledge in the world of finance? Finding the best secured loan can be very confusing at times. We aim to make getting that loan at an affordable rate as straightforward as possible. We have even helped people with bad credit get a secured loan in place after being declined elsewhere. With so many types of loans in the UK it is easy to get lost in all the jargon. First Choice Finance simplifies things by searching well known lenders and specialist lenders to get a loan that will meet your needs. It`s extremely common to get either a secured or unsecured loan. Most people at some point in their life want to buy something they simply do not have the cash to cover. For example a new car, a lavish wedding, or an expensive holiday. A loan simply enables you to live the life you work so hard for, helping you spread the payments over time.

What exactly is a secured loan? A secured loan is a loan secured on your home - this provides some form of security, or collateral. You can often borrow more with loans secured on property, potentially up to £200,000. Secured loans have interest rates that can be lower than that of an unsecured loan for someone with the same credit profile because of the lower risk to the lender. An unsecured loan simply means that there is no `security` for the lender as in the case with a secured loan, and this therefore means a higher risk for the lender. In the absence of security or collateral, the lenders may offer higher interest rates in order for the loan to be more viable for them - especially if you have a poor credit history. This is known as rate for risk.

An advantage of secured loans is that you stand a good chance of being approved even if you have some adverse credit history like county court judgements, defaults or arrears. So a secured loan is a good choice for those who would otherwise not qualify for a loan from their local bank.

Homeowner Secured Loans 9.8% APRC. Representative example: Borrow £50,000 over 180 months. 60 months at 8.1%, £497.83 pcm fixed at 60% LTV. Then 120 months at 10.1%, £539.89 pcm variable. Total payable £94,656.60. Total cost of credit £44,656.60 (including: £795 lender fee, £985 broker fee & £42,876.60 interest). First Choice are tied to certain loan providers.

Mortgages & Remortgages 8.4% APRC. Representative Example: Borrow £120,000 over 25 years at 5.99%, £778.86 pcm fixed for 3 years at 60% LTV. Then at 8.75%, £974.86 pcm, variable for 22 years. Total payable £286,416. Total cost of credit £166,416 (including: £985 broker fee, £999 lender fee & £164,432 interest)

Unsecured Personal Loans REPRESENTATIVE 49.9% APR (VARIABLE) First Choice are tied to certain unsecured lenders.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. Security is required on immovable property.

Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

Established In 1988. Company Registration Number 2316399. Authorised & Regulated By The Financial Conduct Authority (FCA). Firm Reference Number 302981. Mortgages & Homeowner Secured Loans Are Secured On Your Home. We Advice Upon & Arrange Mortgages & Loans. We Are Not A Lender.

First Choice Finance is a trading style of First Choice Funding Limited of 54, Wybersley Road, High Lane, Stockport, SK6 8HB. Copyright protected.