Secured Loan Advice

db.69 · 11 October 2019 at 2:04PM

Hi,

I am considering taking out a secured loan for around £18000.

The reason, I am going travelling for at least 1 year possibly extending this to 2 years maximum, and I want to consolidate all outstanding debt.

I have various sources of income to finance my trip and to pay my outstanding credit at the moment but feel it would be much easier if it was one payment per month instead of several while I am away.

The question really is are they a good idea or bad one.

I am currently not working, and obviously while travelling I wont be working either so a personal loan would be out of the question.

I have a flat which is worth around £85k and has a mortgage of £39k to secure the loan on.

My income will be made up from renting out the flat(£6000pa), renting out a holiday caravan that I have(£3000pa), payments from people who owe money from family loans (all above board and covered by paperwork,£3660pa), and family inheritance (£5000pa). which gives me a combined income of 17660, obviously minus tax which is negligible.

I also have some savings, not much, and will be selling cars etc before I go.

I have searched and rates for secured or personal seem to be around the same. What I haven't found is banks that offer secured loans only finance companies. Is this the norm or can I approach the bank as well?

thanks for reading this far (if you have), any advice would be helpful in making my decision, as I really am in two minds wether to or not.

[Deleted User] · 11 October 2019 at 2:06PM

It's generally a bad idea. However, your circumstances appear to be such that few lenders will want to advance a loan.

Keep your debts unsecured. Once you have direct debits or standing orders set up, it's no more difficult to manage than having one big loan.

djphig · 11 October 2019 at 3:27PM

Normal high street lenders don't tend to offer secured loans, you would have to go to a mortgage broker or specialist packager.

I can say though, that most lenders will not use the income that you have so i don't think you would qualify even if it was a good idea, which it is not.

Keep your debts unsecured.

foxy-stoat · 11 October 2019 at 4:02PM

Bad idea, read about the poor sap who borrowed £12K for 20 years @ 20% interest to consolidation debts and he had an income.

enthusiasticsaver · 11 October 2019 at 4:55PM

You will not get a loan, secured or not if you are not working or have no definite source of income. Would it not be a better idea to pay off your debt before going travelling? I cannot imagine £17k is going too far in paying your mortgage, credit cards and loans and paying for travelling costs.

DCFC79 · 11 October 2019 at 7:39PM

Why not go traveling once you have the money in place eg the family inheritance why not use that to start you off, next the family loans to cover the next part of the trip and the income from the 2 rentals pay for any extras.

I don't see the need for a loan whether secured or unsecured, maybe Ive missed something.

tlc678910 · 22 October 2019 at 8:39AM

The financing of your trip looks very vulnerable- what if your tenants of the flat don't pay their rent? What if the flat and caravan are vacant for a while. Couldn't you delay your travel by a year to have a lump sum as back up?

Secured Loan Advice

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free