The Finance & Leasing Association (FLA) figures showed a marked turnaround in consumer finance lending overall with car financing also up 25% year-on-year.
Typically, secured loans are being used to consolidate debt, or retain low lifetime tracker rates and interest-only loans where borrowers are also looking to capital raise, said mortgage adviser Caroline Burke, mortgage manager at Largemortgageloans.com.
“Mortgage lenders have changed their interest-only criteria in droves so those looking to remortgage would often be forced onto repayment mortgages with other lenders. Secured lenders are often a bit more flexible and have better underwriting teams, so often secured loans become the only solution.”
“We’re doing quite a lot of business with Prestige Finance right now,” she added.
Fiona Hoyle, head of consumer credit at the FLA, said: “As the Government finalises the statutory framework for the transfer of consumer credit regulation to the Financial Conduct Authority in April 2014, it is vital that the supply of credit to consumers is maintained. The start of the new regime is only nine months away, and the new regulator has a lot to do in a very short time to ensure a sensible transition process.”
FLA members include banks, credit card providers, store card providers, second-charge mortgage lenders, motor finance providers, personal loan and short-term credit lenders, and instalment credit providers.
