Secured lending to exit debt management plans on the rise

Specialist secured loan lender Equifinance says that many clients are looking to exit a DMP by using a secured loan, and are seeing a reduction in their monthly payments and have greater access to mortgage products.

It added that part of a DMP agreement should result in a cessation of interest and charges on the debt. However, there are many examples where interest is still charged and as such the balance is not necessarily reducing by 100% of the monthly payment.

Equifinance is now highlighting the benefits of using a secured loan to improve a client's long term prospects. It argues that although consolidation is not always the right answer, a secured loan is often a suitable option given the lower rate charged when compared to unsecured finance.

Tony Marshall, Managing Director of Equifinance, commented:

“As the general economy improves and optimism increases, we are being approached by more and more brokers whose clients’ circumstances have changed and now want to review their DMP. What was right for them a few years ago may not be right now.

“We welcome working with brokers who understand our straightforward and simple approach to underwriting, where each case is assessed to ensure suitability for the client both now and in the future.”