Borrowing for debt consolidation increases

Home News Loans Borrowing for debt consolidation increases

Michelle Monck

Consumer Finance Expert

Published: 21/06/2021

The amount of borrowing to consolidate debt using a secured loan has increased in May 2021 compared to the prior month. Just under 50% of all secured loans were used to consolidate debt, with a further 15% for consolidation and home improvements. A quarter of all secured loans were used to make home improvements.

The data from our preferred secured loans broker, Loans Warehouse also showed that total lending for secured loans increased by £12.4m from £77.6m in April to £90m in May 2021. Completions also increased by 14% for the same period and completion times slowed by one day to 14 days.

Borrowers are also choosing to borrow for longer, with the average term increasing from 13 years to 16 years.

The best £30,000 secured loans over 10 years

The best three lenders by rate for a £30,000 secured loan over 10 years are:

United Trust Bank Ltd, Secured Loan at 3.85%. Maximum LTV 65%. Representative APRC is 6.0% (Fixed).
Selina, FlexiLoan at 3.95%. Maximum LTV 65%. Representative APRC is 6.1% (Fixed or variable).
United Trust Bank Ltd, Secured Loan at 4.15%. Maximum LTV 70%. Representative APRC is 6.4% (Fixed).

These lenders will also consider those with a bad credit history. Compare secured loans for bad credit.

Representative Example
If you borrow £42,000 over 15 years at a rate of 8.59% variable, you will pay 180 instalments of £460.26 per month and a total amount payable of £82,846.80. This includes the net loan, interest of £36,356.80, a broker fee of £3,995 and a lender fee of £495. The overall cost for comparison is 10.9% APRC variable.

Can you get easily get a loan?

Lenders need to show that any borrowing they agree to is affordable for the borrower. In addition, they also use your credit history to help them decide if you are an acceptable risk. A low or poor credit history or score does not always mean you will be refused for credit. There are lenders that specialise in helping those that have previously had credit difficulties – if the borrowing is affordable. A loans broker can help to identify the right lender for you and your circumstances.

Check your credit score for free and compare credit check providers in our guide.

Find a secured loan

Speak to our preferred secured loans broker on 01923 660 296 or arrange a call back.

Borrowers should remember that secured loans often come with additional fees compared to an unsecured loan and their property is at risk if they cannot keep up their repayments.

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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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Borrowing for debt consolidation increases

Michelle Monck