Debt management is a tool that needs to be known, especially for people who borrow money on a regular basis. It is a process by which people who have borrowed money keep track of how to use their debt and how to repay it. One should never allow debt to overwhelm their budget and leave them in an awkward position. Secured debt consolidation is one such technique where you can eliminate your debts effortlessly.
Secured Debt Consolidation Loans are secured personal loans where the customer consolidates all of their debt, which may be in the form of store cards, credit cards, or other small personal loans. The purpose of secured debt consolidation is to reduce interest premiums and thereby reduce monthly repayments.
For example, a person has borrowed from three different creditors at 18%, 19%, and 23%, respectively, which are relatively high interest rates. The average of these bonuses is 20%, which is still high.
Secured debt consolidation loans, which are preferred for debt consolidation, are available at a lower interest rate that can range from 6% to 17% depending on the borrower’s credit situation.
The process of debt consolidation involves the following steps:
o Calculate all the debts you have taken on from different creditors.
o Consolidate any debt that you would have to pay. This is to be done by the borrowers themselves.
o The next step for the lender is to negotiate with the creditors for a full and final settlement of their debts.
o Finally, the lender pays the creditors the negotiated amount.
People can avail the services offered by loan providers by applying online. They can get a lender that would meet their requirements i.e. provide secured debt consolidation loans they are looking for. People who are online can also find other different services offered by the lenders such as:
o More product information
o Offers, ie different maturities, offers and interest rates
o Monthly Loan Calculator to calculate your monthly installments
o Debt Payment Calculator
Other benefits of applying for secured debt consolidation loans online is that one can get loans processed quickly. All you have to do is log in to the site and fill in your details. Processing of your loan begins immediately and results in quick approval.
Features of secured debt consolidation loans are:
o Secured debt consolidation loans require the borrower to provide collateral to the lender. This helps the borrower to benefit from the equity of their assets.
o Secured debt consolidation loans have a lower interest rate, making them more attractive to customers.
o Secured Debt Consolidation Loans are repayable over a longer period of time, which can range from 10 to 30 years at affordable rates.
With the secured debt consolidation loans, a borrower can easily get a loan ranging from ₤5000 to ₤75000. If a person has a disposable monthly income of ₤100 or more, they can get loans for larger amounts. Alternatively, they qualify for smaller amounts.
Many people think they can’t get credit if they have bad credit, CCJs, arrears, or bankruptcy. That is not true. People with bad credit can also get secured debt consolidation loans. However, it may not be possible to obtain loans at lower interest rates or easy repayment schedules. It all depends on the lender’s view of your condition. In the case of bad credit it is important to know your credit score, a score of 620 or more is considered good and a score of 600 or below is considered bad. Proper information about your creditworthiness can help an unsecured borrower obtain a secured debt consolidation loan at correct and justifiable interest rates. If you don’t know your credit score, you may be charged more than you should.
“Putting all your eggs in one basket,” as the old saying goes, may be considered unwise in other circumstances. But when we talk about secured debt consolidation loans, it is advisable to consolidate your loans into a single loan. It offers tremendous benefits to borrowers who cannot service their creditors regularly through monthly instalments. So it is in his advantage that he/she should go for secured debt consolidation loans.