Act now to secure leading loan rate

First Plus, the UK’s largest secured loan provider, has announced that it will pull out of the loans market on August 9. This could have a huge impact on the debt consolidation market as First Plus, which is part of Barclays, has been the leading player for some time and its competitiveness has helped keep the rates offered by other providers down.

Homeowners looking to move existing debts onto a single low-rate loan therefore need to move quickly in order to take advantage of First Plus’ market-leading rate of 6.6% while it is still on offer. This deal is a moneysupermarket.com exclusive and is the cheapest secured loan rate currently available.

While the company will cease offering loans to new customers from August 9, it will continue to service those from existing borrowers.

The decision by First Plus to pull out of the market signifies just what an impact the credit crunch is having on lenders and it is bad news for British consumers, who collectively have accumulated more than £1.3trillion in personal debt. The true impact of this is now coming home to roost.

While many were able to manage when borrowing costs and inflation were low, an increasing number are now struggling to service their debts – not only are borrowing costs rising because of the credit crunch, but households are also having to grapple with rising living costs.

First Plus’ departure from the secured loans market could spell more bad news for these people as it will reduce the options available to those who are finding it hard to make ends meet. This is why anyone considering moving all of their existing debts onto a single loan should apply for a deal quickly, as they could get harder to come by from next month.

Secured loans can be a good option for those with large debts – typically £25,000 or more – as unsecured personal loans are not available for debts of that amount. However, if you opt for a secured loan, you need to be aware that it will be secured against your property, so your home could be at risk if you fall behind with payments.

The other thing to bear in mind when applying for a loan is that the rate you are offered will depend on your credit history. Applications that are declined have a negative impact on your credit score. It is therefore important to apply only for deals you will be accepted for. Our Smart Search tool can help identify the products you are most likely to qualify for.

Secured loans – based on a loan of £10,000 over 60 months (without PPI)

Credit
rating

Provider

Rate

 Typical APR

Monthly
repayment

Total charge
for credit

Good

First Plus*

6.6%

8.1%

£195.23

£1,714

Fair & Square

6.9%

6.9%

£196.56

£1,793

Norton Finance

8.4%

13.9%

£203.21

£2,193

Fair

First Plus*

6.6%

8.1%

£195.23

£1,714

Norton Finance

8.9%

13.9%

£205.44

£2,326

Ocean Finance

9.5%

14.9%

£208.12

£2,487

Poor

Norton Finance

12.4%

16.4%

£221.17

£3,270

Ocean Finance

13.9%

14.9%

£227.97

£3,678

loans.co.uk

18.0%

15.9%

£246.73

£4,804

* Moneysupermarket.com exclusive
Sourced by www.moneysupermarket.com July 8 2008

Disclaimer: Please note that any rates or deals mentioned in this article were available at the time of writing.

THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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