Secured loans are loans secured on your property and are most usually taken out for the purposes of debt consolidation.
Like any other product it is advisable to compare secured loan products, as the interest rates offered across the market vary widely, and these are vital in determining what you will pay back on your secured loan.
In this case, debt consolidation works by allowing you to pay off all your other debts - credit cards, personal loans, store cards and so on - using the funds provided by the secured loan. You then have all your debts ‘under one roof’ and make just one monthly repayment to the secured loan company, rather than an assortment of payments to different companies. If handled properly, this will save you money.
However, if you do decide to take out a secured loan - after you compare secured loan rates - you must remember that the loan, like your mortgage, is secured on your property and you could lose your home if you do not keep up the repayments.
A secured loan, then, can be a valuable financial planning tool, enabling you to save money. But, as we have seen, it has to be handled very carefully, or it could become a burden that ends up putting you under more pressure of debt than you were before.
The secret to making the most of a secured loan is to first make sure you compare secured loan products, then establish that you can afford the repayments without putting yourself under undue financial pressure. Then you have to have the self-discipline to ensure you pay off all the other debts that will be covered by the secured loan. If you do all this sensibly then a secured loan could be a useful financial planning tool for you.