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Secured loans as an alternative to cautious high street lenders

Bad credit loans or secured loans still represent an option for consumers looking for finance in the wake of the recent credit crunch, one expert has suggested.

According to a spokesman for Equifax, a group which offers services and support to the financial services industry as well as specialising in the monitoring of credit files, high street lenders are becoming increasingly cautious in the face of current market stability.

Neil Munroe, external affairs director for Equifax, said despite this consumers are not left without options and many may turn to alternative forms of borrowing - such as an adverse credit loan or secured loan.

"If the banks start to reject people more, people may just not take the money out and this will reduce the amount of borrowing [from them]," he said.

But if people need the money, they may be forced into more high cost borrowing, so forced down into the sub-prime or near-prime market, whereas before they might not have considered going there.

According to figures from Credit Action, the number of secured loans taken out by people at the end of February grew by 9.4 per cent over the preceding 12 months.


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