How to Clear your Debts with a Secured Loan

Getting the money together to clear your debts can be difficult and you may not know where to turn, but with the right knowledge you can get a loan which will allow you to clear your debts and then pay back over a schedule that you will be able to afford. Anytime that you need to borrow money the worst place to turn would be your friends or family, as borrowing large sums can really damage relationships and unfortunately they may never be the same again. It will change the dynamic of the relationship and may come to the point where you feel awkward around them, and this is why this is not a good path to go down.

Anytime a relatively large sum is being borrowed it should be bound up by some form of contract, but even if you draw up a contract with a family member they may feel uncomfortable in chasing you up on it, so this way of borrowing is certainly not worth the risk.

Instead you can apply for a loan which is secured against your property, and there will be a repayment schedule drawn up which is typically over 12 or 60 month periods. This is a long enough period that it means repayments should not hugely change the way in which you live your life, and with a set out repayment schedule it makes it easier to plan and manage your finances as well.

This type of loan is called a home owners loan, or secured loan, and it is the ideal route to choose if you are looking to clear your debts, do some home improvements, buy a new car or anything else. With most secured loan providers you will be able to borrow between £1,500 and £15,000, and this should be plenty to cover you for what you need.

Apply Online for your Loan

The idea of going through the process of obtaining a loan may be off putting to you and may want you to explore your options, but with some of these loan providers, you can easily fill in an online application form and will not have to wait long for them to get back to you. This means that most of the process can be done quickly and from the comfort of your own home, so for any home owner in need of some cash then this will be your best solution.

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One thought on “How to Clear your Debts with a Secured Loan

  • There are many who would advise against encumbering your home. They take the view that ideally you should own a home free and clear of any mortgage or liens. A lot of people have gotten into trouble using their homes as a bank to draw on in this way, so mostly I agree that equity loans should be used very carefully. We were able to get to a point where we have no mortgage on our home; however, we still had $15,000 in credit card debt. So we decided to use a home equity loan at 4.4% to pay off the higher interest credit card. Our monthly payments are much lower (about a quarter of what we were paying) and we will pay a lower total amount in interest over the life of the loan. We are building up our emergency savings to cover the amount of the loan just in case something were to put us in jeopardy of losing the home. With the value of home, the level of our income from a variety of sources, and the emergency savings, we feel pretty confident about using our home to secure the loan. But it isn’t a solution for everyone.

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