I have just taken a secured loan to pay off debt, was it the right move ??
I am hoping in the future I will be able to get an unsecured loan and pay off my secured loan.
Is this possible?
Answers:
For your situation yes, you wouldn't have borrowed the money if you truly didn't need it, since you can pay back the loan on an extended period of time, do not be delinquent or you may risk losing your home. Obtaining an unsecured loan later on will give you wiggle room and your property will not be at stake anymore.
A secured loan is a loan where you will be required to use your property as security against the loan, so the lender is able to balance the risk of lending to you. The amount that can be borrowed differs from lender to lender and your individual circumstances. The amount that can be borrowed, the term available and the Annual Percentage Rate (APR) will depend on:
the value of your property
your ability to repay the loan
your personal circumstances
You need to think very carefully about how you manage a secured loan.
Secured loans allow you to borrow more and repay over a longer period than a personal loan – up to 25 years. They can normally be used for almost any purpose and as the lender has the benefit of security they can be offered to people who may be excluded from other loans. Borrowers who are self-employed, have recently changed jobs or have previous credit problems will be considered for a secured loan. They are also useful for borrowing larger sums or where the applicant requires a longer repayment period.
Secured loans are typically easier to obtain than an unsecured loan because of the collateral involved. This makes the loan a potential option for those who are self-employed, recent graduates, or those with poorer credit ratings may be able to obtain this type of loan.Unsecured loans are given without any supporting collateral. Credit cards fall under this category. Because there is nothing supporting the loan, unsecured loans tend to be smaller and have higher interest rates to protect the lender. Unsecured loans are given on the borrower's promise to pay.
Hope this is helpful.
Some really good advice on www.nationaldebtline.co.uk.
Secured loans should only be taken as last resort if what you are using it for is to pay off unsecured loans you could now lose your house if you can't pay
no rong move! your just givin ur self more debts!
asking if it is a good idea AFTER you have done it is a bit late. what if we say no, there is naff all you can do about it now.
secured loans are a godd from the point they tend to have lower interest rates and be spread over a longer time period so lower repayments.
they are bad in so far as they will have to be paid off before you move house (or during) and if you miss payments your home is at risk.
if you had to have the money, and you have no other way of getting it, then yes, it is a good idea
All you have done is settled one debt with another. Presumably your secured loan is taken out over a ridiculous amount of time. All that needs to happen is for interest rates to go up on your mortgage a couple of times and you will be stuck.
My advice, and it is not to be taken lightly but as a last resort is to look into an IVA. You pay an amount to an insolvency practitioner each month and after 5 years whatever debt is left over is written off. You will only have to pay what you can comfortably afford to pay. However, your credit rating is bad until after the 5 years and you do have to get used to living on a budget.
I can recommend an IVA expert - www.thomascharles.co.uk. They are excellent and have helped me out enormously.
Good luck
You have taken a loan out which could lead to you losing your home if you default on it. Contact your local councils debt adviser asap it's free and they will do everything they can to help you. You do have a cooling off period to reject this loan. Never take out loans to repay debts. Just does not work. If you have ccj registered against you, no you will not get "unsecured loan". You need to speak to debt adviser urgently. Hope this helps your situation..
it is in theory, but you have just made a debt that could only ever at worst get you a ccj have a call against your home.
My recommendation would be to make your first mortgage interest only and use the saving to overpay your secured loan.
The secured loan will have a higher interest rate.
The sooner you get it cleared the better!
If you couldn't get an unsecured loan, could you add it to your mortgage instead? Bet the interest rate on your mortgage is much much lower than the loan you've taken out. Also, because the term is longer you'll end up with less to pay in the short term, although the length of the mortgage will mean you pay a lot of interest over time. But, if you overpay on your mortgage the term will come down too.
Check the redemption penalties on the loan too - bet you'll be penalised for paying it off early. If you're still in your 7 day cooling off period, try to find an alternative.
probably was right move provided ur TAR is now lower cos of interest, u probably wont find it easy 2 get unsecured loan but i think it is possible
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