Loans News

A new type of secured loan has been launched offering borrowers the option to drawdown funds as and when they need them rather than having to take a full lump sum. This new loan, the ‘FlexiLoan’ is the first of its type in the UK and is the creation of Selina Finance, a fintech lender.
The FlexiLoan allows borrowers to access funds secured against their home up to a pre-approved credit limit. Once approved, they can take what they need when they need it and are only charged interest on funds taken. This is a significant difference to other types of secured loans that only offer borrowers a single lump sum. The ability to drawdown funds as needed rather than taking a lump sum could save some borrowers money as they will only be charged interest on when the money is taken.

Borrowers must make the minimum repayments every month and can even pay back the loan in full without incurring early repayment changes. The minimum monthly repayment is based on the funds outstanding over the remaining term. This can increase or decrease as funds are drawn down or repaid.

Borrowers can choose loan terms of up to 30 years, with the first five of these offering the flexible loan features. After five years any money borrowed that is not paid back reverts to a traditional secured loan with a fixed monthly repayment. The borrower can choose to pay this until the term ends or pay off the loan in full.

The FlexiLoan is available up to 75% LTV, with a minimum loan of £25,000 up to £1,000,000 and a minimum term of three years up to 30 years. The loan can be used for several reasons including home renovations where the borrower needs to access funds gradually as the renovation progresses or to pay for private school fees and repaying these across each term.

Many financial experts predict that the easing of lockdown will see a spending boom among consumers looking to spend money they have saved over the last 12 months. While ideally, consumers will be using their savings to enjoy the new freedoms, others may be considering borrowing money instead.

When considering borrowing money, it is not advisable to borrow unnecessarily and borrowers must have the ability to keep up with repayments. But, while it should often be a last resort for consumers, if done sensibly, borrowing can be a useful tool for personal financial management.

For those who have to borrow, the best way to do so is to borrow without paying interest. The best way to borrow using interest-free credit is to have a repayment plan in mind before borrowing the money to ensure that it can be fully repaid before the interest-free period ends so that interest is never added to the money borrowed.

The Secured Loans Index has revealed a 31% increase in secured lending in March 2021 compared to the previous month. There were more than 2000 secured loans completed, at a total of £91.4 million during March 2021. That increased figure is now only 1.72% behind levels achieved in March 2019, a signal that the market is recovering from the effects of the Coronavirus pandemic.
There was a decrease in the number of borrowers taking loans over 85% - a reduction of 4.18% compared to last month.

Spring is now officially here and, especially after the financial impact of the past 12 months, this is the perfect time of year for consumers to take stock and give their personal finances a spring clean.

Spring cleaning personal finances is easy to do and could save money each month as consumers switch to lower repayment options and evaluate existing deals they are on. To help make it easier, we’ve highlighted the key areas to look at when taking stock of personal finances.