We have all seen or heard the adverts on the television or radio for debt consolation, and home owner loans, in fact these adverts seem to be rotating more regularly, especially during daytime programmes. Unsurprisingly, and no doubt due to the money spent on advertising and the apparent ease of getting a loan, secured borrowing is in the ascent (in the final quarter of last year secured borrowing rose over to over £12.5 billion) as home owners take advantage of the increased house prices and lower interest rates coupled with longer repayment periods. One of the main reasons for taking out a secured loan against their homes usually for home improvements, maybe installing either a new bathroom, kitchen, conservatory, or double glazing all of which can be expensive. However, consumers are advised to shop around for the best possible interest rates and deals, ignore the adverts telling you to call now! as deals between one lender and another can vary considerably.

Personal, unsecured loans and debt consolidation loans are also on the increase, with some experts saying that low-rate personal loan are a positive way of tackling debt because they generally have lower interest rates than credit cards. Experts do warn that consumers don’t run up the debt again and to make sure the loan taken out can be paid off. Around one in three personal loans can be approved within minutes when consumers apply online. The apparent ease of getting credit may be to the detriment of those who seek it as many do not seek independent financial advice before applying for a loan. Around 1.39 million people had loan applications rejected in the past six months, which can affect the applicant’s credit ratings. Many seem to believe that just because you can apply using an online application form (31 of the 89 possible loans on the market are available with an online decision) a positive decision will be automatic. Independent financial advisors suggest that those looking for loans use online credit profiling tools so that they can asses which products are best suited to their personal needs, instead of randomly filling out online credit application forms until one gets accepted (indeed some experts are worried that some people will apply for more than one loan as decisions are so instantaneous online).

Credit is a fact of life in this consumer-led society that we live in. If at all possible credit should be used to the consumer’s advantage. The wide variety of loans l available on the market should mean that even the most financially strained could, if they take their time, find a product that suits them.