Surge in demand for second charge debt consolidation loans
The early part of 2017 saw a sharp rise in the number of mortgage advisers looking for second charge loans for clients concerned about their debt.
According to figures from the Bank of England, Brits’ personal debt grew 10.8% in the year to 30 November 2016 to stand at £192.2bn – the highest level since December 2008.
This notable growth in the level of household debt, alongside record low rates on second charge products, are combining to boost demand for second charge, according to Clever Lending.
The master broker points out that, if borrowers are paying a low interest rate on their main mortgage, or they are within an Early Repayment Charge period, a second mortgage can be the most sensible way to consolidate debt.
Sam Kirtikar, managing director at Clever Lending, said: “There are more low rate second charge products on the market than ever before, many at highly attractive rates, so there are real opportunities now for brokers to help their clients. Although we can quickly source lenders who can individually underwrite cases where the customer has debt worries, getting a client’s credit profile in order can help their longer term financial situation. So it’s not just about the here and now.
“Secured loans should be considered as a viable debt solution offering products that are affordable and sustainable.”