Many 'turning to secured loans' for financial control
05/02/2008Many homeowners are turning to secured loans in order to consolidate their debt and take advantage of equity in their property, it was suggested today.
According to the Independent, the current financial climate - in which some credit card companies are becoming less willing to lend to consumers - has caused more borrowers to look at secured loans as a way to regain control of their debt.
The newspaper's discussion of such a topic follows the decision by credit card provider Egg this week to cancel about seven per cent of its customers' accounts as part of what it claimed was a "one-off credit risk review".
But Datamonitor analyst Kieran Hines said some borrowers are now becoming reluctant to use their credit cards because they believe it will exacerbate debt levels.
"More consumers are used to using debit card for day-to-day payments and are using them for higher-value purchases," he suggested.
Secured loans can be useful for those who want to consolidate their debts and pledge their property as collateral for the amount borrowed.
 © Adfero Ltd
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