Secured Debt Consolidation Loans aims to give the latest best advice on secured debt consolidation, if your finances include expensive debts that you may be thinking of refinancing or consolidating to reduce your loan payments.
The benefit of secured loans
The major benefit of secured debt consolidation over unsecured consolidation is of course that it is much cheaper, both in monthly payments and in total payment because it will always involve much lower interest rates. While unsecured loans like credit card debt may have interest rates of 25% or more, secured loans will often have interest rates nearer 5% - way cheaper.
The risk of secured loans
Of course this major cost benefit of secured loans over unsecured loans does involve one possible problem, in that defaulting on the cheaper payments would put at risk your security collateral which will probably be your home.
This is a risk that millions of people are happy to take because secured loans are so much cheaper. So millions of home owners have secured loans in the form of a mortgage, and millions who want to buy a home or a business will get a secured mortgage loan to do so.
Secured loans as investment capital
In fact secured loans can often be so cheap that some advise people to have as big a secured loan as they can reasonably manage. Many have become rich on the back of cheap secured mortgage loans, seeing them and using them as investment capital. The main thing is simply to be sure that you can pay them and do not miss payments or be late with payments.
Secured loans for debt consolidation
If you have unsecured debt such as credit card debts then you can cut their cost by directly or indirectly switching them to a secured loan and this is chiefly what is meant by debt consolidation. So a good secured loan can help you to manage debt wisely. You may be able to do this either by getting a new secured loan, or by doing a 'remortgage' if you already have a secured loan.
Secured loans need good lenders
If you have or are considering any loan, secured or unsecured, then it is important to try to be sure that it is with a reasonable lender because there are some 'loan-sharks' about who may use unpleasant and illegal methods to exploit their customers. So for any loan it is always best to borrow only from a reputable bank or loan company.
Debt consolidation and credit cards
Using a low interest secured loan to pay off high interest unsecured credit card debt is good. But to help your credit score it is ideal to have a couple of credit cards with high limits as long as you do not use them to the limit - ie pay them off each month or have balances below half their limits.
It is best not to close high-limit cards, just cut their balances. But it is OK to close cards that have small limits if you have too many cards.
The finest advice on managing money is that secured loans can be financially very useful for anybody with any money sense, but all loans can be risky if you are not responsible about money.
Secured loan debt consolidation can be used by a wide range of people, and used to deal with a wide range of debts including student loans.