Secured bad credit loans used to be looked upon with some derision in years gone by. Now they make complete sense, and we should be glad. Official UK figures tell us why.
According to CreditAction UK, total UK debt in 2006 now exceeds £1.1bn, while secured lending was less than £1bn. Yet the average value of a home now exceeds £200,000 while average household debt in the UK is less than £8,000 excluding secured loans. So by leveraging home equity to alleviate debt, consumers could reduce their outgoings dramatically.
Average consumer borrowing via credit cards, motor and retail finance deals has grown five fold in 5 years. Yet the average house price in the UK in November 2005 stood at £186,431 (source: Office of Deputy Prime Minister).
New lending sources are springing up which take into account all circumstances. This new market for secured bad credit loans has opened up in the last few years, and it has grown outside of the mainstay of the High Street banks. As long as consumers have property then they can raise as much cash as they like to pay off existing debts. Nor do people have to pay the exorbitant interest rates that used to be the case with people whose credit rating was not perfect.
Would it not make sense to pay £60 a month in servicing a debt than £150 a month servicing exactly the same debt? Secured bad credit loans provide that opportunity.
The only sensible way forward is quite clear. Consumers need to convert the high interest debt into low interest debt by using their property as security. Even if people’s credit rating is quite poor it makes more sense to pay off the same amount of money at a lower interest rate by means of a secured bad credit loan.
Increasingly people are taking bigger financial risks, especially those in business and the entrepreneurial minded. The secured bad credit loans market is expanding to take account of that because it has to. Of course, consumers should not consider bad credit secured loans if they are not absolutely sure they can meet the repayments.
Gordon Goodfellow is an Internet marketer, and market and social researcher. His website dealing with secured bad credit loans, www.secured-bad-credit-loans.co.uk , takes into account almost all possibilities that a potential borrower might present.
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