We’ve seen a sharp increase in broker enquiries on behalf of clients needing to get their credit profile back in shape at the start of 2017.
Latest figures show household debt has risen to its highest level since just after the financial crash of 2008, Bank of England data shows. Personal debt grew 10.8% in the year to 30th November 2016 to £192.2bn in the UK – the highest level since December 2008. And the Registry Trust report the continued rise of CCJs, making it more vital than ever that homeowners look to satisfy their CCJs and other debts.
Although consumers have loaded up on their credit cards, taken out personal loans and ran down their savings to fund the festive season and household bills, there are solutions and the second charge market may favour them due to an increasing number of low rate products.
It’s vital to understand that resolving the immediate debt concerns is often a priority, but it’s also important to look to the future and open up a better long term financial scenario for the client.
Most brokers are now aware of second charges to help clear long term debt and the speed at which they can be funded, however, not all are using them to their full potential. And if the client’s first charge mortgage still has early repayment charges or are have their first charge mortgage on a great rate, they can keep that product and use the second charge to consolidate other debts that have built up.
There are also new systems to help brokers such as Clever Sourcing which can provide options in as little as a minute once the client details have been input.
We have an extensive panel of lenders and there are more low rate second charge products on the market than ever before, many at highly attractive rates, so there are real opportunities now for brokers to help their clients. Although we can quickly source lenders who can individually underwrite cases where the customer has debt worries, getting a client’s credit profile in order can help their longer term financial situation. So it’s not just about the here and now.
Secured loans should be considered as a viable debt solution offering products that are affordable and sustainable.