Are the majority of secured loan lenders responsible?
Looking at the negative press around debt, are borrowers and lenders acting responsibly?

Every day you open a newspaper or turn on the TV, it’s hard to avoid a story telling us we are drowning in debt. Celebrities have been criticised for appearing in adverts promoting financial products such as secured loans, but are these concerns well-founded?

Concern

As the pace of change in the financial services sector has increased, groups such as Citizen Advice are concerned that many consumers are bewildered by financial issues such as secured loans. £33 million has been invested by the government into the advice group to help provide more financial advice to the public.

Debt
We are a nation in debt. On average, people seeking help from Citizens Advice were £13,153 in debt. It’s clear we need to manage our finances more effectively. However, some financial services, such as secured loans, can help us manage existing debt from high interest charges from, for example, credit cards.
Affordability

Just because someone will lend you money, it doesn't necessarily mean you can afford to borrow it.  It is important that borrowers think carefully about the repayments and have contingency plans if their financial circumstances change unexpectedly. It helps to draw up a budget and you should always think carefully before you borrow via secured loans. Many internet sites offer loan calculators to help you understand the cost of your borrowing.

Responsibility

Despite the controversy around debt and responsibility, The British Bankers Association maintains that the majority of borrowers and lenders are responsible.

Report

A recent report claims that individual unsecured debt is three times higher in the UK than anywhere else in Europe.
Some experts believe there should be more comprehensive measure to ensure that secured loans and unsecured loans will be repaid.
Despite this, many people use credit in a responsible way and reap the benefits of secured loans, and the BBA concluded that the vast majority of borrowers in the UK are responsible - and that the same was true for most lenders.

Both sides of the argument

One of the most high profile controversies was a loan company using Carol Vorderman as the face of their product. Some people believe the moral uproar has been misplaced. And many industry professionals agree that the secured loans market has become a necessary part of the financial services industry. It is important that the people in the industry, and the public, are shown the products for what they are and when they should be used. And it is clear that there have been many improvements in recent years to make borrowing more consumer-friendly.

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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