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Secured loans 'on the rise'

More and more consumers are taking out secured loans, a new study reveals.

The loans, which are also sometimes known as homeowner loans or bad credit loans, are taken out against properties.

Loan providers are generally happier to lend in this manner - as opposed to an unsecured personal loan - among what are seen as 'high risk' customers.

The study found that rejection rates on personal loans had risen by 15 per cent to 20 per cent over the past year - and that homeowner loans had shot up accordingly, from 23,000 to 42,000.

Interest rates on these bad credit loans vary widely, depending on the perceived risk of the borrower.

However, the rate offered can sometimes compare favourably with those from personal loans, the Daily Mail reports.

The study was carried out by MoneyExpert, and covered the period from Autumn 2006 to Winter 2007.

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