• Secured loans are similar to mortgages: they are secured on your property and your home is at risk if you do not keep up the repayments you have agreed.

• If your current mortgage carries a redemption penalty which would make a re-mortgage unrealistically expensive a secured loan may be an alternative solution.

• If your mortgage is on a particularly good rate which you would lose because of problems with recent adverse credit problems if you re-mortgaged then a secured loan can be a simple way to release money from your house.

• If your credit rating has become poor through problems with your unsecured debts it may be possible to raise a loan by offering your home as security. However a credit check will still be undertaken and serious adverse credit information or missed mortgage payments will affect you ability to get a secured loan.

If a secured loan is your preferred option to resolve your debt problems then Debt Solution Services will be glad to put you in touch with a specialist secured loan brokerage.

Before you consider taking out a debt consolidation loan you should consider the following:

1. As there are sometimes charges and penalties for early completion of a credit agreement always ensure you obtain a settlement figure from your existing lenders rather than a balance. Otherwise you could find you have not borrowed enough to repay your other debts in full.

2. Once you know exactly how much you owe and what the cost of your debt consolidation loan will be, you must take time to work out a realistic income and expenditure figure to establish whether or not you can afford the new payments. Remember to include an amount for contingencies and emergencies. If the sums still do not add up, then perhaps you should consider some form of debt management plan.

Pros of a debt consolidation loan

• May be able to reduce your monthly payments.
• Can take off some of the pressure you may be under from your existing creditors.
• You will have only one creditor to deal with.

Cons of a debt consolidation loan

• Can cause you to pay more over a longer period.
• Can give you a false sense of financial security and lead to further borrowing on credit cards and overdrafts leading to even higher debts in the future.
• This will be a further loan secured against your home and your home may be at risk if you fail to keep up the payments
• In some circumstances, you may have to seek permission from your current mortgage lender to secure a further loan on your home.
• You will not be able to get a secured loan if you have mortgage arrears
• May incur additional costs for setting up the loan.
• If the loans you are consolidating have all the interest added at the start you may in effect be paying interest twice. The interest charged for the first loan and the interest charged for the consolidation.

If you are considering a loan to consolidate your debt problems, or would just like more information, contact one of our advisors today for advice on how best to resolve your debt problem.

Cons of a debt consolidation loan

• Can pay more over a longer period.
• May incur additional costs for setting up the loan.
• If secured, your property may be at risk.
• You will be left with only one creditor - this can make it difficult to negotiate should you have further problems in repaying your loan.
• If the loans you are consolidating have all the interest added at the start you may in effect be paying interest twice. The interest charged for the first loan and the interest charged for the consolidation.

If you are considering a loan to consolidate your debt problems, or would just like more information, contact one of our advisors today for advice on the total spectrum of debt solutions that may be applicable to your situation.