Debt consolidation using a secured loan

12th September 2007

Debt consolidation is a term used to describe the bringing together of many sources of personal and unsecured debt, such as credit cards, store cards, personal unsecured loans or overdraft bank accounts into a single, more manageable loan. Due to the high levels of consumer debts in the UK, many people have overspent and may be in a position to no longer afford to pay off short-term debt. If you are unable to pay off the minimum monthly charges then your credit rating will suffer and you may find it hard to obtain future credit or loans.

By using debt consolidation, you can arrange for a new loan to cover all of your outstanding personal debts. This new loan can be tailored to suit the repayments that you can realistically afford to pay each month until the loan is paid off.

Debt consolidation is one of the main reasons why people apply for a secured loan. Secured loans normally offer a much lower interest rate as compared to the average annual interest rates you are currently charged by greedy credit and store card providers, or by unsecured personal loan providers.