Secured loan to consolidate unsecured loans

phil_rich1983

Hi, hope this is the correct place.

We have a lot of credit card debt and overdrafts (circa £45k) so i would like to either get a second charge or some sort of secured loan taken out to pay all of these off with. Some of the credit cards are now running at 18%apr

I would imagine that our credit file is average, a few late payments in the last year as the bill have mounted, but all up to date now and being paid back at minimum rate. We are paying over £1k per month in minimum payment so a load is bound to be a cheaper alternative.

We have a mortgage but have about £110k of equity in our house.

thanks for any advice

[Deleted User]

Generally a bad idea.

Start by listing out your debts, by type and rate. Then, do a statement of affairs, working out where you spend your money and what you have left over.

There will undoubtedly be improvements you can make before getting further debt and risking your home.

The DFW board can offer invaluable help.

Pixie5740

Forget turning unsecured debt into debt secured against your home. If you are struggling to keep up with your debt repayments contact one of the debt charities; CAP UK, National Debtline or Step Change.

Late payment of unsecured debts is one thing, late payment of secured debts is another. Besides, unless you tackle the root cause of your overspending then consolidation will not work.

PeacefulWaters

I would imagine that our credit file is average, a few late payments in the last year as the bill have mounted

Late payments are not "average". They are poor financial management and below average.

Why has the bill mounted? What's the money being spent on? Why can't you afford it out of normal wages?

You've been overspending. How are you going to stop this?

Missed payments on a secured loan can lead to repossession. Without solving your overspending issues it's an awful idea.

DCFC79

Your plan OP isn't what you need to do (not even sure it would get far), you need to stop spending money so cut back on the luxuries, shop at the discounters for your groceries, these are all ways to save money and there's more you can do.

Get over to the dfw board and post an soa.

Ebe_Scrooge

I can't really add anything to what others have said - other than to agree with their excellent advice. Shifting your debt to a secured loan would be sheer madness. Yes, the interest rate will be lower, but the consequences should you fail to meet the repayments will be dire.

Post an SOA on the Debt-Free Wannabe board - you'll get lots of helpful advice on there. And if you're really struggling, contact StepChange, they'll be able to offer some excellent advice. But don't - REALLY DON'T !! - take out a secured loan.