Loans Blog

Gullible teens, who's skin tissue has now morphed with their chairs through Facebook addiction - leaving them with only 'virtual' friends, are being targeted by unscrupulous loan companies plaguing the antisocial networking site with dodgy personal loan ads.

Debt charity, Credit Action, claim that regular loan ads are targeting those with bad credit ratings through the geeky world of Facebook.

They urge these vulnerable individuals, who have lost the basic skills of real human interaction, to report any instances to the Facebook web site.

I read a piece this morning about using your jewellery as collateral against a secured loan to finance a new car purchase.

All perfectly legitimate, of course, but it got me thinking - imagine what car Jimmy Saville could buy if he took out a personal loan secured against all of his jewellery!

Rumour has it (yes, I've been talking to my source down the pub again) that legendary rocksmiths 'The Cure' got their name from a personal loan advisor with a lisp.

Robert Smith and his musical pals were pacing around the lounge desperately trying to think of a name for their band at his Sussex home one afternoon in 1976, when the lispy loans expert knocked on the door. Smith answered the door and the salesman asked,

"May I offer you thumb perthonal loan advithe, thir?"

Mr Smith replied: "What kind of loans are you offering, sir?"

"Thecure loanth, thir."

"Genius! The Cure! That's it!" Smith proclaimed as he shut the door.

The secured loan salesman went away a little confused and deflated that day. If only he knew what a vital part he'd played in the history of this great band.

Not many people know the true nature of the wise advice James Brown was trying to instill into property buyers when he famously remarked "Take it to the bridge."

His typical 110% enthusiasm and energy, caused him to run out of breath before completing the sentence, which should have concluded "Take it to the bridging loan."

This is, of course, 'soul speak' - meaning "Take out a bridging loan to finance your next property move."

What a genius.

Please note - these facts may not actually be facts, but a very knowledgeable bloke in the pub told me them and I have no reason to doubt him.

A logbook loan is just one of the many types of secured loan available on the market.

The most common type of secured loan is secured against a property, as this is usually the best valuable asset most borrowers have to offer as collateral to secure the risk posed to the lender.

However, a secured loan can be secured against anything that meets the value of the loan. A logbook loan, as the name suggests, is secured against the value of your vehicle. It's called a logbook loan because you hand over your logbook to the lender as security for the duration of the loan term.

In the current wobbly financial climate, the secured loan is continuing to take centre stage as lenders pack their carefree, risk-taking attitudes into a box in the bottom of a wardrobe in the spare room - hoping they'll make use of them in the future; knowing they probably won't; but unable to part with the idea just yet.

Results of recent research conducted by Alliance & Leicester show that “overall borrowing trends are moving away from unsecured debt, while secured lending continues it’s rapid pace.”

I remember my grandparents telling me how they were taught really useful home economics skills in school. My experience of this lesson was learning how to make a bland lasagne and care for your tupperware. But they actually learned economics - how to manage the family budget and make your money stretch further etc.

Now, it seems, these skills are dying away with that generation as more and more teenagers and young professionals fail to take seriously the long-term implications of spending money they don't have and embarking on a lifetime of debt through personal loan financing. They appear completely ignorant to even the individual consequences of their borrowing habits, let alone those facing the economy as a whole.

According to the Mortgage Introducer web site, “over half of Britain’s young people are in debt by the time they reach the age of 17 and think overdrafts and credit cards are an easy way to spend more than they can afford, setting a pattern for the rest of their life.”

Is it time for a serious look at the curriculum? Somehow, I don't think raising an army of clueless teens with average lasagne skills is going to eradicate the problem.

It seems that the penny - albeit a borrowed one - still hasn't dropped for some people regarding the purpose of a debt consolidation loan. These kind of loans exist to help you find a way out of debt - they are not intended to be another avenue for running it up.

As the Chief Executive of MoneyExpert.com, Sean Gardner, says: "it is crucial that borrowers see consolidation as a wake-up call to get debts under control. It shouldn’t be something you keep on doing simply to tide you over from year to year.”

Nemo Personal Finance, the secured loan subsidiary of Principality, announced last week that it is to axe 70 jobs at their Cardiff HQ.

The move comes as a necessary reaction to the credit crunch. Senior bosses at Principality say they will re-deploy staff in other areads of the business.

In recent years, the UK has experienced a huge increase in the number of people applying for a secured loan. This is set to grow further still, amid the credit crunch which is seeing banks tighten their purse strings as lenders offering unsecured loans become increasingly difficult to find.