The credit crunch, which went on for almost three years, saw the secured loans industry on it’s knees. Even although mortgages and remortgages also fell, it was not in as dramatic a fashion as secured loans which fell to less than 20% of their previous level.

Secured loans are also known by the other names of homeowner loans and second mortgages, and they have these names for reasons that are very obvious.

The reason that they have the name, homeowner loan, is because only homeowners can apply to refinance home, as these loans require an asset which is the residential property of the borrower. The name, second mortgage, is because they are in fact exactly that, in that they rank behind the current first mortgage on a property, and are registered at the Land Registry as such.

They were always a very popular method of borrowing for homeowners for a number of extremely good reasons.The first reason was that they had low rates of interest which before the recession started from about 5.9% APR which was as good as remortgage and mortgage rates, and as such many homeowners opted for a secured loan instead of a remortgage as they were quicker to arrange than a remortgage which takes on average double the time to pay out.

Secured loans have a multitude of uses from home improvements to holidays, paying for a wedding, etc. etc.

Secured loans also make good debt consolidation loans where by a debt consolidation loan, with a low interest rate pays of all the other high interest debts in credit cards, etc. into one much cheaper payment each month granting enormous savings.

Homeowner loans do not have a hefty penalty if paid off early, unlike a remortgage.In those pre recession days, a secured loan was a very common choice of loan for the self employed, as they did not require accounts, and simply wrote their earnings on a letter head which was known as a self cert, and was very useful for those who were unable to prove their income.

The recession saw the criteria for homeowner loans restricted to such an extent, that a vast majority of people who were eligible in the past, no longer were.

The withdrawal of self certs left a great many self employed incapable of obtaining one of these home loans, and it continued like this for three years,. until now

Link Loans re entered the market and they were the first glimmer of hope for the self employed with the introduction of self employed loans without accounts for those only trading for a minimum six months period.

The equity is tight at 60% LTV, but none the less it is a step in the right direction. Link also accept applications from self employed applicants with a minimum age of twenty one, when before, the minimum age for a self employed homeowner loan applicant was twenty five which does sound rather ludicrous.

All these changes are heartening and hopefully there are more improvements to follow shortly.

Unsecured Business Loans