Refinancing a Secured Loan???

andy777_2

A friend has a loan secured against his home that he's struggling to repay. I have suggested that he refinance the loan by finding a new one on better terms and using it to pay off the old, more burdensome debt.

Is this a common practice or do the costs of refinancing a secured loan out-weigh the benefits? Also, what is the difference between having a loan secured on a property and a mortgage on it?

Finally, if he could use an unsecured loan to refinance the loan, would that make sense?

Any advice would be appreciated!!!

Verbatim

Wow/

No expert but secured loans tend to be for a shorter period than motgages and for a shorter typical period. If your friend can get a better rate without a huge set up fee it may work out better but there's no alternative to doing the sums carefully.

Why not look over on the mortgage and loans board where you'll find more expert advice.

CLAPTON

if your friend is struggling to pay his debts then the first thing to do is to review income and expenditure and see whether he can increase his income or reduce his spending. i would suggest you introduce him to this board and encourage him to post a SoA (statement of income and spending and details of debts and assetts) so he can be helped to balance his budget....

rayday2

Secured loans actually slightly effect your credit rating so it could be a tad harder to find a better deal. Is it the cost of the secured loan he is struggling with or does he have other credit cards etc that are making things harder?