Monday, May 14, 2007
Category:
Secured Loans
The Bank of England recently revealed that the increase in total net lending to individuals in March, £10.8billion, was lower than the increase in February but in line with the average from 6 months ago.
Also the twelve-month growth rate fell 0.1 percentage points to 10.5%. At 10.4%, the three-month annualized growth rate fell by 0.2 percentage points.
The increase in net lending secured on dwellings (£9.9 billion) was less than the increase in February but above the previous six-month average. From February the twelve-month growth rate was unchanged at 11.5%. A decrease of 0.2% was present in the three-month annualized growth rate which fell to 11.5%. In March, the Bank of England noted that the number of loans approved for house purchase was 111,000, those for remortgaging 100,000, and those for other purposes were 72,000. These were all lower than the figures quoted in March.
Although March saw an increase in net consumer credit, it was lower than the increase in February. However the rise in net credit card lending of £0.2 billion was higher than the amount in February. Net other loans and advances increased by £0.7 billion which was lower than the increase of £0.9 billion in February. The annual growth rate of consumer credit was unchanged from February at 5.9%, and the three-month annualized growth rate fell by 0.3 percentage points to 5.1%.
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Homeowners looking for funds to carry out home improvements or consolidate debt with a remortgage, could consider a
secured loan as an alternative. Repayable over a term to suit the borrower, a secured loan can usually be repaid over a term of 5 to 25 years. Secured loans may be used to cover costs of both large and smaller scale home improvement projects. Larger projects include extending to add extra rooms while refitting kitchens and bathrooms and redecorating may be considered as smaller scale projects; both of which may be financed with a secured loan. When using a secured loan to consolidate existing debts, it is however important to remember that repaying borrowing over a longer term will increase overall interest charges.
