If you are struggling under a mountain of high interest debt, you may be able to find some relief by way of a secured loan obtained against the equity in your home. Secured debt consolidation loans are usually low cost loans that are fast and reasonably easy to acquire. Obtaining such a loan could make it possible for you to consolidate all of your payments into a single monthly payment that is more in line with your budget.
Secured Loan Expert can help you find the most attractive loan for your circumstances. We specialise in secured loans offered by the best banks, building societies and specialist lenders in the UK. As long as you own a home with decent equity, finding a loan that works for you should be fairly straightforward.
Secured and Unsecured Debt
Why should you consider a secured loan for debt consolidation? To answer that question, it is helpful to understand the difference between secured and unsecured debt. A secured debt, like one of the loans we are talking about here, gets its name from the fact that collateral is being offered by the borrower to secure, or guarantee, payment. A home is usually the collateral offered on a secured loan for debt consolidation.
Unsecured debt is that which you obtain simply on your promise to repay. There is nothing held or offered in security as a guarantee of payment. The most common form of unsecured debt in the UK is the credit card. Your bank or credit card company extended a line of credit to you based solely on the fact that you promised you would make good on your debts.
Unsecured debt incurs a higher interest rate because the lender is taking a higher risk. That is why you may be paying upwards of 12% or more on a credit card. Secured debt is just the opposite. A bank might offer a secured loan at just 5% because they always have the option of repossessing and selling your home in the event of default.
Consolidating and Lower Rates
It should be clear as to why someone would be better off consolidating high-interest unsecured debt into a low-cost secured loan. For the purposes of debt consolidation secured loans can cut interest rates drastically and reduce monthly payments at the same time. Not only does this help the monthly budget, it also reduces the total amount the borrower repays over the life of the debt.
For purposes of illustration, let us just say you owe £100 each on two unsecured loans at 12%. If you paid off both loans in one year, the combined principal and interest would total £224. If you combined both loans into a secured loan at 5%, the total amount paid at the end of the year would equal £210. You would save £14 by consolidating the higher interest debts into a low-cost secured loan.
Think about it. If you could save £14 on a very small one-year loan, imagine how much you could save on a 25-year loan of tens of thousands of pounds. That's a lot of interest saved just by consolidating outstanding debt into a single, secured loan at a lower rate.
Bad Credit Okay
It is not uncommon for consumers to end up with bad credit after taking on too much unsecured debt. Lenders understand that. Your bad credit is okay as long as you have a home with a decent amount of equity. Again, lenders are willing to take a risk because you are securing a loan with your home.
You should consider the option of secured debt consolidation loans if you find yourself overwhelmed by high interest debt. A consolidation loan can lower your monthly payment, reduce the total amount you will pay and help you begin the process of repairing a poor credit rating. There are very few downsides to this sort of consumer financing.
To get our free expert advice all you need do is call our friendly team for a confidential discussion regarding your requirements and we will do the rest. Our team will find the best deals that suit your personal circumstances from our whole of market panel of lenders. We will help you compare and chose the best offer available and submit a fully optimised application on your behalf that will show your case in the best possible light.
Our team are totally transparent in their dealing and you will be informed of all costs attached to the loan before you make any decision to go ahead with an application. For professional help and advice call our friendly team of experts today.
We source the best rates from the whole market
- Borrow up to £2,500,000 Depending on the Equity in Your House.
- Adjustable Repayment Terms from 3 to 30 years.
- Secured Loans Can Be Used for Almost any Purpose.
- Low Interest Rates.
- Rapid Approval - Low Arrangement Fees.
- Options for Homeowners with Bad Credit History.