Secured bad credit loans were looked on with a bit of derision in years gone by. Now they make total sense, and we should be glad. Official UK figures tell us why!

According to CreditAction.org.uk 'At the end of December 2005 the total UK personal debt was 1,158bn. Total secured lending on property in December 2005 was 965.2bn. This has increased 10.4% in the last 12 months.' This is during the time the average UK consumer debt is 7,786, and that is excluding mortgage debt.

Average consumer borrowing through credit cards, motor and retail finance deals has increased five times in five years. Yet the typical property value in britain in November 2005 worked out at 186,431 (source: Office of DPM).

The figures tell their own story. The much higher interest payable on credit cards, motor and retail credit (store cards etc.) bite a considerable chunk out of the typical person's monthly budget. The only sensible way out of this is fairly obvious. Consumers need to convert the high interest debt into lower interest credit by making use of their property as security. Even if people's credit status is fairly poor it makes more sense to pay off the same amount of money at a lower interest rate by means of a secured bad credit loan.

Now new lenders are becoming available which consider all circumstances. This new market for secured bad credit loans has grown up in the last few years, and it has grown outside of the mainstay of the High Street lenders. As long as consumers have property then they can borrow as much money as they want to pay off existing debts. Nor do consumers have to pay the high interest rates that used to be the case with people whose credit worthiness was not the best.

Would it not make sense to pay 60 a month in servicing that debt than 150 every month paying off precisely the same amount? Secured bad credit loans offer that opportunity.

Improvements in financial chance handling assessment mean that loans providers are readily prepared to take into account secured bad credit loans where they were not considered in the past. The self-employed, especially, are not treated as they have been, particularly with the fresh approach towards self-certification. Three years of audited books are no longer automatically required from those people who choose to work for themselves. People with County Court Judgements, IVAs, people who have defaulted on past or existing finance agreements and even discharged bankrupts are now usually considered in today's changing world of credit.

Increasingly consumers are taking larger financial chances, especially people in business and the entrepreneurial minded. The secured bad credit loans marketplace is increasing to take account of that because it must. Of course, borrowers should never consider secured loans where they are not completely sure they can make the repayments. Those people should look at unsecured loan products (which are more expensive).

But, as CreditAction.org.uk states, the average value of a house in the UK is '186,431 (195,319 in England). UK yearly house price inflation went up by 2.5 %. Annual house price inflation in London was 2.2 percent.' Putting all that capital to good use by means of a secured credit loan is an option most people would consider, whatever their credit status.