The packager says the changes mean that all secured loans for residential purposes of any size now come under the CCA.
Andy Moody, managing director of Loanoptions.co.uk, says: “Every loan therefore has a cooling off period, so the client is not pressured and early repayment charges are a maximum of two months interest, depending on what point in the current month they notify the lender. “
He says: “When you add in that there are no upfront fees in the shape of application fees, booking fees and valuation and conveyancing costs, then it doesn’t take a genius to work out that on a direct comparison basis in many cases, secured loans are going to be better value for clients.”
He adds: “Clients tied in to their first charge lenders, customers with a deteriorating credit record since taking out their existing mortgage, or those who wish to repay their new borrowing within a short period of time, are those who will most benefit from secured loans.”