Help - debt …..Anyone know about secured loans ???

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so we have debts and we just feel like we don’t know whether we are coming or going!? With what payments we come out.

we own a house and prob in about 50k equity

would a secured loan be a good option too put all our debt into one so we have one payment ?

any advise welcome , we are really contemplating it but just feel scared that it’s secured on your home , we both have full time jobs

about 60k household income

thank you 🙏🏼

Nobody here should give you advice on what loan you should get - without an understanding of what has caused this situation.

1. You need to understand that debt consolidation loans are very slippery slopes - and these are not intended for people who can’t understand whether they are coming or going.
2. you need to write down and total up - every single debt, the interest rate on them, the monthly payments.
3. you need to write down income and outgoings clearly to see where the outgoings go.
4. You then need to consider your options - including debt management advice from free sources such as Step Change.

looking for a secured loan against your property to consolidate debts you don’t understand is possibly not what you should be after.

Of course I understand my debts , maybe I could have worded that better but I know what they are .

There isn’t much else to understand I wanted to add them to one monthly outgoing payment rather than here and there payments

I really just wanted to know if a secured loan is a good or bad thing ? And if anyone had any experience with having one .

A secure loan would be an absolute last resort imo.

As pp said, consolidation loans often don't work in that people just rack up more debt.

Suppose what you really need to know is exactly how you got into debt and whether it has a chance of happening again.

People don't mean you know what your debt is, they mean do you understand how you got to be in so much debt in the first place?

How much is the debt? An unsecured loan would probably be safer than using up most of your equity.

Probably not a good idea. At the moment if you default the worst that will happen is that eventually a court might order you to pay it back at an affordable rate.

Once it’s secured then failure to pay could lose you your home.

Shuffling the debt around isn’t normally the answer; you need to understand where and why you are spending more than you earn and make the changes to stop this.

capuk.org

CAP uk is a good call plus the other debt charity which I believe is step change.

Can you afford the current payments? Is it just the random days they leave your account that is causing issues? If that's the case, can you add up the monthly debt repayment, and set up a separate current account with the debt repayments coming out, and a monthly payment in from your account just after payday?

Or, could you consolidate the debt into less with out securing it against your house?

What kind of loan amount are you talking about?

Are you making inroads into paying down your debt or is it still racking up?

Work with one of the debt charities.

I have used a secured loan for debt consolidation. I also then did the exact same thing all over again because I did not make the necessary changes or have the required personal growth to change habits. Fortunately I did not default and due to a house move was able to settle the debt early from my equity.

I also paid very, very high interest, because my credit wasn't good, partly from the amount I owed and because I was drowning.

If you are able to make some serious changes and address your spending habits I think you would be far better off working with your lenders. Some may agree to pause interest or at least reduce it if you stop the account (no further credit) and go into pay off only mode. Several card companies did this for me at one point.

While it might not be what you want to hear, what people are saying is correct. People focus on the 'one payment' when it's neither here nor there in the days on direct debits, internet banking and freely available spreadsheets etc. If matters not a jot whether your budgeting spreadsheet has 20 lines on it or 25 and its certainly not worth risking the security of your home to have a couple fewer direct debits going out.

Plus if you're looking at a secured loan from a 'secondary' provider, ie not remortgaging, it's likely to work out very expensive, especially as it's likely that the interest rate could be variable so will get more expensive if interest rates rise as expected.

A poll on an old financial forum I used to use found that about 80%+ of people who took out a secured loan got into further debt because they didn't learn to budget and couldn't actually afford all their normal outgoings, the loan, and then savings for annual/irregular expenses like car repairs etc.

You need to thoroughly review your budget, see if you can cut the cost of your debt by transferring to interest free cards, and possibly consider a more formal solution like a formal debt management plan or IVA if you're at the point of debt crisis as in you can't afford all your normal expenses and your debt repayments. Because otherwise, it's likely that the interest charges will mean that most of the money you pay goes on interest and you could end up treading water and getting nowhere for years.

Have a look at Moneysaving Expert and do everything that is relevant to your situation.

www.moneysavingexpert.com/banking/budget-planning/

Nope, get a non-secured loan if you really have to, but a secured loan is a very bad idea. Alternatively, borrow Dave Ramsey’s Total Money Makeover from your local library, for some rock solid strategies for getting out of debt, staying out of debt, and changing your mindset so you never go into debt again. Ramsey’s podcast is worth a listen too, but stop listening when he starts taking about other random stuff. He is a dick with some hardcore conservative American views, but he knows what he’s talking about when he’s talking about debt.

If you get an unsecured loan, it won't put your home at risk. When I was in trouble, I tried various brokers such as loan-tube.uk who hooked me up with a reasonable loan for twenty grand. Otherwise, you can always try a credit union.

Hello - dropping in to say we've got a Q&A about debt live in Money Matters this week if that's of interest!