Beware unregulated secured loans, expert urges - Credit cards - News - Moneyfacts

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Beware unregulated secured loans, expert urges

Beware unregulated secured loans, expert urges

Category: Credit cards

Updated: 03/12/2008
First Published: 02/12/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers have been advised to beware of potential pitfalls when looking for finance sources in the economic downturn.

According to personal finance site, many firms will be seeking to take advantage of vulnerable people.

Ways of doing this include offering secured loans that require ownership of the borrower's car to be transferred to the lender, with the vehicle being sold at auction if the debt is not repaid.

And the portal noted that credit card cheques can also be expensive, with transaction fees typically amounting to three per cent of the cheque's value.

Financial expert at Ed Bowsher urged consumers to be careful, adding: "If you are struggling to make payments talk to your lender and if you do use a store card or credit card cheque - ensure you pay the amount off in full each month."

The site recently suggested that borrowers should use the 2.5 per cent reduction in value added tax to help pay off secured loans more quickly.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Credit card mistakes cost borrowers £948m

At this time of year, many people could be turning to balance transfer credit cards in an attempt to overcome their Christmas debt. However, many of these borrowers could get caught out in the year ahead, and they could end up paying for it.

6 of the best balance transfer credit cards

Does the thought of opening your credit card bills fill you with fear? If so, you're not alone! Christmas may be over, but unfortunately, many people will still be paying for it, after turning to credit to cover the cost of their festive spend.

Get a better credit score for the New Year

A new year means a fresh start, and one of the best things you can do is take a cold, hard look at your finances – particularly when it comes to your credit score.