Secured loans/unsecured loans

coolsteel · 5 August 2005 at 7:42AM

Saw a program on TV about unsecured loans, what the guy was saying was there is no such thing as an unsecured loan as if you default payments, the loan company will come after you and make you sell your assets to recoup their money, so you may as well take out the cheaper secured loan deal, all I believe in the T/C. So definitely worth checking how they recoup their money if you default payments.

Coolsteel :cool:

Rafter · 5 August 2005 at 9:28AM

The company has a right to recover its money for sure, but they are also obliged not to make you destitute or force you to sell your home.

Sure they can get a county court judgement, force you to pay a certain amount and even send in the bailiffs in extreme circumstances, but with a secured loan they have a right to force you to sell your own home - that is why secured loans are cheaper, because they will only lend you the equity in your own home (or possibly a bit more) which is very low risk for them.

I certainly wouldn't recommend a secured loan. If you are in financial difficulty, think about remortgaging or making arrangements with creditors rather than putting your house at risk and paying over the odds versus a mortgage rate. Secured loans are often as long term as mortgages anyway so paying 8-10% for a secured loan when mortgages are at 6% and below seems crazy.

R.

fatbelly · 6 August 2005 at 12:29AM

Rafter's advice is sound but I also saw that programme.

What the guy said is that some lenders insert a clause that he called an 'all-monies' clause that allows the lender to convert an unsecured loan to a secured one. I presume this would bypass the usual CCJ - default - charging order route.

I'd be interested to find out how that works and which lenders use it.

coolsteel · 6 August 2005 at 7:56AM

Lets face it, Building Society's repossess your house if you cant keep up the repayments so cant see loan company's giving a hoot how they recoup their money as long as they get it. If they put you out on to the street to get their money they wont give a damn.

Coolsteel :cool:

Xbigman · 6 August 2005 at 4:00PM

fatbelly wrote:

Rafter's advice is sound but I also saw that programme.

What the guy said is that some lenders insert a clause that he called an 'all-monies' clause that allows the lender to convert an unsecured loan to a secured one. I presume this would bypass the usual CCJ - default - charging order route.

I'd be interested to find out how that works and which lenders use it.

I've been telling people on the debt frree wannabe board that a company must get a CCJ in order to start the process of turning an unsecured loan into a secured one. If I'm wrong and an 'all monies' clause exists I'd certainly like to hear about it.
Regards

X

bery_451 · 7 March 2006 at 12:28AM

out of 1000's of companies offering unsecured loans, which ones take people with ccj's and defaults?

savvy · 9 March 2006 at 6:59PM

Hi bery
I've moved your post here so that you may find some useful information on your query.

Secured loans/unsecured loans

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