How Can I Get Help Paying Off a Secured Loan Debt?

The last couple of years have been a struggle for many and secured loans with attractive interest rates have never been so appealing. Secured Loan Debt comes in many forms; it may be the mortgage on your home, it may be the loan on your car or it may be the only way you could secure funds due to a bad credit history.

Whatever the reason, paying off a secured loan debt can be a struggle and if you get into difficulty, such as a change in circumstances mean you can no longer afford the monthly repayments, there are options available to you to help.

What is a Secured Loan Debt?

Firstly, let’s just clarify what a secured loan debt means – it is a loan of funds from a bank or another financial institution which is ‘secured’ against one of your assets of equal or greater value to the loan.

They are popular with consumers and businesses generally because they incur lower rates of interest, larger amounts can be borrowed and it is often the only way someone with a bad credit history can secure funds. However, they have their drawbacks and the biggest is that should you default on repayments and not be able to pay off the secured loan debt, the lender is entitled to seize the asset as full payment through the court.

Nobody likes to lose something this way. If it’s a car or jewellery, that’s hard enough but if you have secured the loan against your home, you could potentially lose it. The other aspect to consider is that a secured loan is a priority debt and as such, repayment of this debt needs to be prioritised over and above other unsecured debt, such as a credit loan or overdraft.