Secured Loans Dubbed Useless

Fri, 04 Jun 2010

Consumer website Which? has named secured loans among its list of the top ten useless financial products. The financial division of the firm, Which? Money, produced a list to highlight the ways in which people waste vast sums of money on financial products which they do not require and could end up harming their credit rating . Explaining the decision to include secured personal loans in the list, Which? Money cites the risky nature of these loans as a reason for their inclusion, noting that it is possible for borrowers to lose their homes by virtue of falling behind on loan repayments. The cost of a secured loan is high at present, with banks charging high interest rates owing to their cautious approach in the midst of an economic downturn.

The controversial payment protection insurance was also listed as one of the top ten useless financial products, with Which? Money once again suggesting that consumers do not really need this form of insurance, or at least that there are very few cases in which the premiums charged on the insurance are worthwhile to a borrower.

The other eight products listed in the list were debt management plans, mobile phone insurance, extended warranties, structured products, ID fraud cover, store cards and packaged accounts.
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