Before the onset of the credit crunch there was a stigma attached to secured loans, which prevented some people from exploring their benefits. However since the credit crunch more people are being forced down the secured loan route because a majority of the unsecured lenders have decided not to lend anymore. Unfortunately the unsecured lenders are not the only ones that have suffered as a result of the credit crunch; there has also been a significant reduction in the number of secured lenders in the market place. The ones that are left have also tightened their underwriting criteria making it more difficult for people to get approved for a loan.

SO WHAT IS A SECURED LOAN?

A secured loan is a loan that is secured on your property. When you take out a loan of this type the lender will place a charge on your property, which means that if you fail to repay the loan the lender has the ability to force the sale of your home to recoup their money. This is the main reason that there are more secured lenders than unsecured i.e. the lender is more likely to get their money back.

SO WHAT ARE THE BENEFITS?

There are a number benefits of secured loans as opposed to unsecured loans and they are detailed below.
1) They are available for larger amounts up to £100,000 if you have enough equity in your home.
2) They can be taken out for a longer period of up to 25 years which spreads the cost and reduces your monthly repayments.
3) They are more likely to be approved, even for people with bad credit.

Because of the reasons mentioned above they are ideally suited to be used as a means of debt consolidation.

To consolidate is to repay all your existing finance including any credit cards and unsecured loans, by means of taking out a larger loan at a better interest rate and spreading the costs of repayment over a longer period.

When used wisely debt consolidation can have such a huge impact on not only your financial situation, but it can also provide a new found peace of mind. Especially if you have been struggling to make ends meet and pay your bills as and when they come in. This is by far the most sensible option open to you if you are finding it difficult to keep up with their finances and can even help to improve your credit score. By consolidating your debt and managing to keep up with the repayment plan you are demonstrating that you have a firm grip on your finances. Do not however be tempted to start using your credit cards again, as that could put you in a worse situation than you are already in.

In Summary

Secured loans can still be arranged in today’s economic climate, and can be really helpful to those of us who might be finding it difficult to make ends meet. Especially when used to consolidate debt and help get your finances back on track.

Author Bio: Tom Dawson is a UK finance specialist who has worked in the UK finance industry for a great many years, if you are looking for secured loans, or debt consolidation loans of any kind visit his website.

Category: Finances
Keywords: secured loans, debt consolidation, consolidation loans