Lenders' Secured Loan Funds Are Still Available Despite The Credit Crunch Article

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Lenders' Secured Loan Funds Are Still Available Despite The Credit Crunch

What criteria are UK lenders using to new secured loan applications? What differences has the April changes to the Consumer Credit Act made?

Author: Giles Hardcastle

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Even though the global credit crunch has reduced the selection of loans available for consumers, there are still many loan options and different loan plans available. If you look further back than the last few years, you'll see that we still have much more choice than at previous times.

There has been a shift in lender priorities from funding mortgages to funding secured loans. The reason is that it's easier to fund a smaller secured loan than a large mortgage. It is less risk for the bank and so a more attractive source of business.

In the current climate, what are the maximum lender limits that are generally available?

100 % LTV ( Loan to Value i.e. when you compare the loan to the value of your property)

85% LTV Self - Cert ( Self Employed Certification )

70% LTV Self - Cert ( Employed Self Certification )

Loans are available to those aged from 18 to 85 years old

A maximum term of 40 years. This is important because you can reduced your monthly outgoings by borrowing over a longer term. Don't panic at the thought of being in debt all those years; the idea is you're going to clear it much, much sooner when you finances are more favourable.

50% Debt to Income Ratio

100% LTV is available for ex-council houses

What's the Lowest Interest Rate for those with a good credit history?

APR from 6.7%

What are the benefits of the April Consumer Credit Act changes?

All secured loans whether large or small have a redemption notice of 28 days + a maximum one month's penalty interest. This is great news for those taking out larger loans because previously the penalties for those borrowing over £25,000 where much more.

The 'cooling off' period has been extended from 8 days to 16 days. That is an advantage if you're undecided but can mean more delays in getting your hands on the cash. If you are currently in your 'cooling off' period then there is still an opportunity to continue to shop around and improve your deal.

Don't let the current media focus on the credit crunch mislead you: funds are still available for secured loans, and funds are more readily available for secured loans than mortgages.

About Author

Giles Hardcastle writes advice on loan issues for iSecured Loans - http://www.iSecuredLoans.co.uk

Article Source: http://www.1888articles.com