How do you get out of a secured loan?

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Brindle_2
Brindle_2 Posts: 42 Forumite
Hi...

I have 2 secured loans with the Halifax.

I would like to get out of them and feel I was duped into them by saying that I would get a lower rate rather than how it would be bad for my credit score.

I have 1 loan with £3600 left and about 3 1/2 years left. 8.9%

and

2nd loan has about 20 years left and is about £19K left. 6.9%

I don't have a good credit history but do have a lot of equity in my property and have recently paid off a credit card.

I do have 2 other cards which 1 in over its limit just and the other one is on a low fixed rate for life of the balance.

I used to be quite bad with money but now never miss any payments (except for that 1 credit card).

I have given you this info to give you an idea of my finances as a whole.

Do you know if I walk into the bank if I can swap the secured over to a personal easily or I am better of applying to other companies and getting a personal with them, I really don't want the secured loan as I feel its being very detrimental to my credit score.

Sorry to be long winded but if anyone can help, I would be much appreciated.
£20k In A Year Challenge
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Comments

  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    A secured loan (or unsecured) has no detremental effect on your credit score PROVIDED you keep up with the repayments!
    If your credit score is not A1 then you wil not better the rates you have now.
    If you get an unsecured loan you will have to pay the £19k one over a much lesser period (at most 84 months) could you afford the MUCH larger repayments?
    The only other option I see is to remortgage - BUT THIS MEANS CONSOLIDATING MORE DEBT FOR A LONGER TIME PERIOD, what seems cheap now works much more expensive in the long run when you add up the total amount of interest you will pay.
  • regularsaver1
    regularsaver1 Posts: 4,930 Forumite
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    Brindle - does this mean that you have your mortgage there too? cause you could do a further advance at your chosen time scale - or remortgage elsewhere

    makes no difference to your credit score, although it might sound silly - sometimes people are turned down for unsecured loans but offered secured due to their equity

    if you repay these loans there will be interest penalty of approx 2 months - call to get the repayment figures that change daily

    generally the maximum timescale for unsecured loans is around 7 years - could this be a possibility as your payments will be larger?


    i am confused on the 8.9% bit as all the separate secured loans are based on standard variable rate - 6.5% (shortly to increase) - i'd double check these things. the rate is higher if your mortgage is elsewhere
  • Brindle_2
    Brindle_2 Posts: 42 Forumite
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    Thanks...

    My £3600 loan is definately on a secured loan and is o n 8.9%. I checked the figure parcifically before posting this thread.

    Yes my mortgage is with the Halifax as well.

    Are you trying to say that yet again the bank has ripped me off by giving an 8.9% loan when it should have been 6.5%? As far as I was concerned was that my secured loans were seperate to my mortagage.

    My first concern is the small loan and want to clear that asap but the larger loan may have to wait a year or two until I have cleared the smaller loan and then use what I reapy on that towards the larger loan. 7 years maxium for the large loan would be a bit of a struggle but not once I have cleared the larger loan.
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  • regularsaver1
    regularsaver1 Posts: 4,930 Forumite
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    no - i said generally about the rate and it depends what the reason was for and when it was taken ect

    further advances could only used to be done for home improvements before regulation changes unless it was a minimum of £25005 application = now can be any reason - so the rate could be say for example 5.39%. but there would be a further advance fee

    in one way i understand why you are concerned, but the secured route was probabaly offered because of your chosen timescale. you could have done unsecured originally - but the maximum timescale woyld have applied
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