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Borring money over a longer period of time to repay debts is called consolidation. A secured debt consolidation loan is when the loan is secured against your property. There are pros and cons to secured debt consolidation loan:

Pros

• Reduce your monthly outgoings
• Potentially get a lower interest rate than equivilent unsecured loans
• Longer terms available to help minimise repayments

Cons

• If you are paying less each month, you are likely to end up repaying more. Check your agreement thoroughly and speak to you assigned advisor for full details.
• Secured loans are exactly that, default too many times on repayments and you are putting your home at risk. So think carefully before agreeing to any deal. Can I afford to borrow that much with a secured debt consolidation loan?
  

How can a consolidation loan help?

If you are considering getting a loan to help consolidate your debts into one loan, you should be careful with your spending and give yourself a budget. Consolidation loans work best if you are serious about taking control of your finances. They can help by: 

• Reducing monthly payments
  
  Spreading out the term of the money you owe will typically reduce your monthly repayments to a controlable level. Often just paying the least amount each month allowed on the existing debts is far more costly. This means covering the interest of the loan while leaving the actual money owed unchanged. A single larger loan amount can also often attract a low interest rate.
  
  
• Improve your credit rating
  
  By consolidating your debts, closing down debt facilities such as credit cards - you increase your credit score and make your self more atttractive for future credit.

Secured loan consolidation or personal loan consolidation

If you own a home there are two main ways to consolidate your outstanding debt, credit cards, store cards  - secured loan consolidation or personal loan consolidation. Secured loans offer the ability to loan large sums of money at low rates, while personal loans. A personal loan is limited by £25000 max and only available over 7 years. And, in this extreme case - the lender is not likely to lend this sum of money to someone with a less than perfect credit rating. This is where secured loan consolidation comes into its own - it can offer someone with bad credit the opportunity of a fresh start and a reasonable loan rate.