Secured loans - in plain English!
The financial jargon around secured loans can leave you confused and misinformed.

A Citizens Advice survey found that one in ten people who took out secured loans believed that they could miss payments without their home being at risk.
Much of the misunderstanding has been blamed on the lack of clear explanation and plain English in financial information.

Secured loans

Secured loans are part of the personal lending market in the financial sector that is growing at a furious rate. Concern was raised when it was revealed that one in ten customers were not aware that if they missed payments their home would not be at risk – which is not the case.

Plain English

One report revealed general confusion about financial jargon – a third of consumers said they did not understand basic phrases, which tell them how their pension or investment works.

Help

As a result of the work of the Plain English campaign, Citizens Advice and the finance industry, there are now guides for consumers to help them make informed decisions and cut through garbled, obscure financial phrases.
The Plain English Guide to Financial Terms contains over 450 definitions of financial services and money related phrases. The aim of such guides is to promote financial inclusion and empower people to make informed financial decisions.

Confusion

Lack of understanding has been blamed on why many consumers are not confident about taking up financial services and products.

The plain English interpretation of secured loans is: ‘A loan that is borrowed against a particular asset, known as security; if a person cannot make the repayments when they are due, the lender can take ownership of the asset.’

Benefits

However secured loans are often an easier alternative to re-mortgaging. Secured loans can be tailored to the customer’s requirements, and now fixing up secured loans is quick, easy and can be done at the click of a button. There are also no legal fees involved, unlike re-mortgaging.

Most secured loans are also cheaper than unsecured loans as there is less risk for the lender. Customers can also borrow more money with secured loans, although it is advisable to think carefully about affordability as ultimately, your home could be at risk if you failed to keep up the repayments.

Loansum is a specialist broker that searches the market to find low rate secured loans that are right for you. Call us on Freephone: 0800 848 8046 or email help@loansum.co.uk to find out how we can help you.

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