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Credit crunch may make secured loans a more competitive option

Secured loans may be a better bet than unsecured borrowing at the moment, if figures from uSwitch.com are anything to go by.

Research by the group has revealed in the past month eight providers have increased the interest rate on their unsecured loans by as much as nine per cent.

Furthermore, the total number of loans available has fallen from 56 to 52.

Commenting on the study, Louise Bond, personal finance manager at uSwitch.com, said: "As the news agenda overflows with the global financial meltdown, a plethora of loan rate increases have been implemented in the past four weeks."

She added the fact best buys were changing every day indicates just how unpredictable and volatile the market is at the moment.

Homeowners may find they get a more competitive deal with a secured loan.

With secured borrowing, the customer's home is used as security and the lender is usually prepared to offer a better rate of interest because the risk it is taking is reduced.


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