New figures have revealed that secured loan lenders has slumped in the first months of 2010 – but that is no reason why you shouldn't consider a second mortgage to help you manage your finances.

According to the Finance and Leasing Association, secured loan lenders lent just £27m in January of 2010, a 27% reduction in lending compared to December 2009. It also found that over the last year second charge mortgage lenders lent just £339m, an 82% reduction on a year earlier.

Fiona Hoyle, FLA head of consumer finance, says: "We have seen a slow start to the year in terms of new business, but affordable credit will play an important part in supporting the economic recovery in the coming months."

There was also some very good news within the figures – direct unsecured lending was down 52% in January across the UK – so while less people opted for secured loans less people saw the need to increase risky unsecured lending also.

While the market for secured loans is certainly muted, there is still money being lent through second charge mortgages. That's money that has gone towards debt consolidation, home improvement and sensible investment – all of which has improved hundreds if not thousands of people's financial situation.

If you think extra money taken from your remaining home equity could help your financial situation, talk to a mortgage adviser about the benefits of secured loans. They are not for everyone, but for some they could be the answer to all their prayers and problems.

SOURCE: FLA, 26/03/10

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