2020 saw a sharp rise in the number of homeowners looking to utilise a second charge loan to consolidate their expensive long-term unsecure debt.
This notable growth in the level of household debt, alongside record low rates on second charge products, are combining to boost demand for second charge loans.
2021 has seen the trend for second charge demand increase again as borrowers are shifting away from expensive shorter term unsecured loans. It would seem the so called “pay day” lenders are far less attractive to the homeowner due to the extremely high interest rates being charged.
A second charge loan will not suit all needs, debt consolidation is a complex issue and needs to be researched to ensure the best deal is found.
As an example, borrowers who are paying a low interest rate on their main mortgage, or they are within an early repayment charge period, a second charge mortgage can be the most sensible way to consolidate that expensive debt.
There are now a lot lower rate second charge products on the market than ever before due to lenders recognising the growth in this form of lending.
Lending these days is a very confusing area for most consumers with so many alternatives available. It is highly recommended that anyone considering taking out a new loan should seek independent professional advice as a mistake could prove very costly in the long run.
Can we help?
If you are considering taking out a secured loan, please do make contact and one of our fully qualified independent advisers will be happy to assist.