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The increasing number of providers withdrawing from the secured loans market has led to some consumers fearing that they will no longer have this personal finance option.

Just last week, First Plus’ announcement that it would stop taking on new customers added it to a list of companies already including Alliance & Leicester, Capital One Bank, Picture Financial, Loan One Intermediaries, SPPL, Breeze Loans and Money Partners.

However, financial analyst with moneyfacts.co.uk, Michelle Slade, believes that consumers will have to wait to see whether the remaining providers continue to offer their services. She said, "Unfortunately, many lenders are no longer finding secured loans a viable business option.

“They face the same funding issues as mortgage lenders and with house prices continuing to fall, lenders can no longer be sure that, if a consumer defaults on their loan, they will have enough equity in their home to repay the debt.

“If the credit crunch can cause one of the biggest lenders in secured loans to throw in the towel, it will be interesting to see if the other providers can weather the storm.”