Anyone had any experience with secured loans???

rich81

Hi

Has anyone had any experience with secured loans for consolidating unsecured debts? Are they always a bad idea or can they work?? Also, is the interest front loaded on credit report, or does it look like a mortgage which just shows the balance without the interest.

Money_Rollercoaster

Generally, turning an unsecured debt into a secured one isn't a good thing. Yes, it looks like a good deal sometimes, as your repayments are lower, but over time you often pay a great deal more interest and of course if you default or fall into arrears, the stakes are a lot higher with the security of your property involved.


Why not post a bit more information about your situation, your debt / income levels I'm sure there will be other options that will come out of that.


Often, a good first step is to complete one of these ...


http://www.stoozing.com/calculator/soa.php

sourcrates

its usually a terrible idea.

Interest rates are often variable, so can change at the whim of the lender.

Also you take these loans over a long period of time, ten or twenty years is not uncommon, you cannot predict what will happen during that time, plus the interest you repay over that timescale is phenomenal.

If your struggling with your repayments now, much, much better to speak to your lenders about stopping or reducing the interest you pay, borrowing more money is not the answer.

another_casualty

I had a homeowner loan with white label , a subsidiary of West Bromwich building society.
To me they seemed a bit shady . I was paying around £200 p m , yet it didn't seem to help,1,iota.
The loan was for £20,000 . In 7 years, the balance remaining was £14,000 approx .
Because it is a secured loan on your property , it is a second mortgage . Sounds painful when it is said that way .
So, that meant my £525.00 pm mortgage was increased to £ 725.00
Pm approx .
Add to that, all my other bills and I could hardly breathe .

So , for me consolidation does not work .

Grazeley

We did this in October with 30k and seriously regret it. one of my cc was 0% interest and now its on the secured loan at 16%, my mthly payments didnt decrease and now my house is at risk.

enthusiasticsaver

They are always a bad idea. Usually ends up more expensive due to length of time you pay it back over, delays you dealing sensibly with overspending as people think consolidating means getting rid of debt (it doesn't - it just moves it and often credit cards end up building up again meaning the figure escalates) and puts your home at risk.

January2015

I consolidated unsecured debt into a secured loan in 2011. Worst thing I ever did. We ran up more unsecured credit because we thought we could afford it. If only I had realised there were solutions to deal with debt other than converting to a secured loan. It took me another four years until January 2015 to realise things like DMPs exist to support people in debt deal with the problem, rather than shuffling it onto a secured loan and incurring thousands more in interest payments.