There are serious consequences to Secured Loan Debt, find out how to avoid it and what to do help manage your debt.
Secured Loan Debt - Help and Guidance
The consequences of failing to keep up with the payments on a secured loan are vey serious. It’s important that you know how to manage your payments and what your options are should you fall behind.
What Is a Secured Loan?
A secured loan is one in which the borrower gives an asset (for example a car or a property) as security for the loan. This means that the lender can sell your assets to repay the money owed if you default or fail to meet the agreed repayment terms.
Each lender will be different in their approach to this and your interest rate can be dependent upon your credit score when you apply for the secured loan. Before they agree to offer you a loan, they will take your income, credit score, current lending history and asset equity into consideration.
If you are in a good financial position and you have decided that you wish to take on secured loan debt, it is a good idea to shop around for the best interest rate by using comparison websites.
What Happens If I Can’t Pay My Secured Loan Debt?
If your financial situation changes unexpectedly or you are struggling with mounting debts, it is important to pay your secured loan debt as a priority, since your home or other assets could be at risk.
If you default on your repayments, your secured lender can begin the following procedures:
- They will try to contact you by letter, telephone or email.
- They may pass your debt to a third-party debt collection agency. The debt collection agency will continue to contact you by letter and telephone and may visit your home to try and recover money owed to them.
- If unsuccessful, the secured lender may take legal steps to repossess the asset that the debt was secured against, which means your home, vehicle or any other asset you offered as security may be sold to repay your debt.
Can I Stop My House Being Repossessed?
There are several ways of managing your debts to prevent your home from being at risk:
- Prioritise your secured loan debts
Ensure that you set aside your repayment amount each month so that you meet at least the minimum monthly payment.
- Stick to a budget
Create a list of all of your income and outgoings for each month and create a budget that you can realistically afford. Take a look at our Debt Help section on Managing Debt.
- Don’t bury your head in the sand
Speaking to the secured loan lender as soon as you begin to struggle with meeting repayments is the best way to deal with the debt. Many lenders will be sympathetic to your situation if you are truthful and honest and may help you with extra time to make a payment.
- Contact Debt Movement
We offer help and guidance to assist you in taking control of your finances.
If you have been notified that your house is going to be repossessed, you must get help immediately. There may still be options available to you. Contact us for free today for impartial help and guidance from our friendly team of professionals.
I Need Help Managing My Secured Loan Debts
If you have other debts that you are struggling to repay, there are many ways you can get back in control of your finances. Take a look at the Debt Solutions section of our website for more information on a debt consolidation loan or IVA. Or you can contact Debt Movement for, non-judgemental information about all of the debt solutions available to you based on your financial situation.