Unsecured loans now represent a viable alternative to second charges and remortgaging for homeowners, Ray Boulger, senior technical manager of John Charcol, has said.

Boulger said mortgage brokers should know about unsecured loans and be prepared to turn away clients who would be better off taking one out than a mortgage.

For consumers looking for between £7,500-£15,000 Sainsburys, Marks & Spencer and Zopa can provide loans at 3.5% per annum typically up to five years, while due to protections built into the Consumer Credit Act the maximum early repayment charge is one month’s interest.

Brokers would be throwing away commission, but Boulger reckoned they have a responsibility to do right by the client and get clued up on what’s available.
Boulger said mortgage brokers should know about unsecured loans and be prepared to turn away clients who would be better off taking one out than a mortgage.

For consumers looking for between £7,500-£15,000 Sainsburys, Marks & Spencer and Zopa can provide loans at 3.5% per annum typically up to five years, while due to protections built into the Consumer Credit Act the maximum early repayment charge is one month’s interest.

Brokers would be throwing away commission, but Boulger reckoned they have a responsibility to do right by the client and get clued up on what’s available.