That’s according to Tim Wheeldon, chief operating officer of Fluent Money, who said there was still some resistance to the idea that remortgaging might be the wrong advice, which he put down to three reasons: the past perception of secured loans, an incorrect view of the costs involved and a reluctance to deal with an unfamiliar sector.
Wheeldon added: “That does mean that there are customers going into a remortgage who would have been better served by a secured loan. Those clients could be at a disadvantage on many levels including an extended length of term they did not want for the extra borrowing, a compulsory change to C&I repayment and seeing their monthly costs increase or the loss of a good long term rate on their existing mortgage, among others.”
Despite Wheeldon’s concerns, activity in the secured loan market is increasing. Figures from the Finance & Leasing Association (FLA) this week revealed that £259m worth of secured loans were taken out in the second quarter, up by 36% on the same period last year.
Wheeldon concluded: “Changing attitudes to secured loans were never likely to happen overnight, but I believe we are making headway, just not as quickly as I think the situation demands.”