Personal Secured Loan

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Getting a personal secured loan over an unsecured loan allows you to borrow more by placing your property as collateral to the loan. For business or home improvement purposes this is a clear advantage. However, in debt consolidation purposes it should only be used as a last resort as all your existing debts will then be settled by your own home if you fail to meet repayments.

A personal secured loan increases your borrowing options dramatically against an unsecured loan. Plenty of lenders who would refuse to lend you an unsecured loan on the grounds of lending responsibly will suddenly change their tune when the loan is secured against your home. This is why the vast majority of debt consolidation loans are of the personal secured loan variety.

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If you're simply borrowing a large amount of money, or looking to fund a business, then a personal secured loan will get you the money you need at a more attractive rate. This is because you'll be on the lender's variable rate of interest. But for debt consolidation, please be aware that this is your final chance to resolve your financial situation. If that's the case, be sure that your repayments will be reduced, and that if the period is extended you can handle the loan for that length of time. There are a few companies who have another approach by negotiating a partial write-off of some debts.

If you are borrowing for essential repairs to your property, you may benefit from a remortgage instead, or be offered a particularly low rate on the loan.

When dealing with large sums, be aware that interest rates suddenly become very important - a few tenths of a percent can really mount up over time, and the fringe benefits such as payment holidays and flexible payment dates become insignificant. You don't have to stick to your original mortgage lender, shop around and choose the lowest rate. Also, consider speaking to a financial adviser, especially if you are remortgaging. Some personal secured loan deals are only available through independent financial advisers, and attract very good rates.

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