How to Take Control of Your Property Loan Repayment Issues!
You have taken on a property loan by using the equity in your home as collateral. Now you find yourself in a position of being unable to keep up with the payments. What do you do? What are the risks if you eventually default on your loan? We will answer these questions in the hope of reducing your stress levels and helping you devise a strategy to keep things going. Rest assured that your current difficulties are not the end of the world. There are ways to solve your problems.
The first piece of advice we can give is that you should not panic. There are others all over the UK in the same position after having taken on an equity loan. Thankfully, there are tools in place to help borrowers get their finances back on track.
Contact Your Lender
The average consumer has an unfortunate misconception about banks and other lenders. They assume that financial institutions are controlled by greedy individuals who would be happy to see you default just so they can repossess your property. However, this is not true. The vast majority of lenders are willing to work with you in any way they can to help avoid default. So contact your lender and explain your circumstances.
Understand that going through the default and repossession process is costly and time-consuming for lenders. They want to avoid it just as much as you do. Most of the time you'll be able to work out more affordable repayment arrangements that take into account you’re changing financial position. At the very least, the law would allow you to enter into what is known as an individual voluntary agreement (IVA) with your lender.
Consider Debt Management Services
Debt management services exist to help consumers facing financial trouble get back on track. You have a choice of working with a for-profit company or a local charity. In either case, these can help you assess your budget and offer sound advice for getting out of financial trouble. Heed that advice. Those advising you have years of experience and accumulated knowledge that should prove invaluable in your situation.
There is one caution regarding debt management services: be wary of for-profit companies offering debt consolidation loans that will allegedly reduce the amount of money you owe. Sometimes these offers are nothing more than scams. In addition, it is probably not a wise idea for you to take out additional loans to pay what you owe if you are already in trouble.
You should strongly consider looking for ways to reduce your expenses regardless of the debt management service you use. If you are like most of us, there are things you can cut out of your budget if you are willing to sacrifice a little.
The Risks of Doing Nothing
We have offered you a couple of ways to deal with falling behind on your property loan payments. Now we need to make you aware of the risks of doing nothing. Should you decide to not contact your lender and/or seek out debt management services, you face the very real possibility of losing your home. Remember, you offered your home as collateral when you applied with your lender. In turn, the lender placed a second charge on your property.
If you do nothing then your lender may repossess your home to cover the money you borrowed. As the second in line, any money raised from the sale of your property will first go to satisfying your mortgage. The property loan lender gets whatever is left. If that is not enough to cover your debt, you will still be legally responsible for the balance.
Falling behind on a property loan is not the end of the world. It happens more often than you would think. Nevertheless, there are ways to get your finances in order if you are willing to put forth the time and effort. Here at Secured Loan Expert, we hope you are willing. It would be a shame to see your credit rating and future financial status harmed when there is help available.
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