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Secured Loan Debt Help & Advice

Write off up to 81% of your debts

Secured loans are often the stepping stone that helps you buy some of the most important things in your life – usually your house and car. They’re also useful for raising larger sums of money – for example if you need to buy several items of furniture at once, or you’re renovating your home. However, as with any form of credit, you need to be careful.

Debts secured against your home or other valuable items shouldn’t be taken lightly, because the company you borrow from can take them from you if you fail to keep up with payments. They can also take all the normal debt recovery routes to do this, including using debt collectors, sending threatening letters and persistently contacting you. In the long term, this can damage your credit score and cause you high levels of stress.

And if your home or other items are taken, this doesn’t always mean the debt is settled. In cases where the money raised from the selling of the secured item doesn’t cover the outstanding balance, the company can still take you to court to get the rest of their money.

 

What is a secured loan?

Secured loans are often a stepping stone, used to help you buy some of the most important things in your life – usually your house and car. They’re also useful for raising larger sums of money – for example if you need to buy several items of furniture at once, or you’re renovating your home. However, as with any form of credit, you need to be careful.

Debts secured against your home or other valuable items shouldn’t be taken lightly, because the company you borrow from can take them from you if you fail to keep up with payments. They can also take all the normal debt recovery routes to do this, including using debt collectors, sending threatening letters and persistently contacting you. In the long term, this can damage your credit score and cause you high levels of stress.

And if your home or other items are taken, this doesn’t always mean the debt is settled. In cases where the money raised from the selling of the secured item doesn’t cover the outstanding balance, the company can still take you to court to get the rest of their money.

Benefits of secured loans

Secured loans can offer a cheaper way to raise larger amounts of money, but there are risks. The interest rate on a secured loan is often lower because the risk to the loan provider isn’t as high. The downside of this is they have the right to take the secured item if you can’t keep up with your payments.

It’s not a good idea to take out this type of loan to help you pay off other bills such as your credit card or council tax. There are always other options that don’t involve putting your home or other possessions at risk.

What happens if I default on a secured loan?

The loan company will normally write to you first, asking you to make a payment to cover any you’ve missed. Don’t ignore this letter, even if you can’t pay right away.

If you have missed payments and your loan provider is threatening you with repossession, you need to act quickly. Stay in contact with them and make it clear that you’re keen to sort out the problem.

If your lender does not want to offer you other payment options and is looking to proceed with court action, contact one of our advisors. We could help you find another debt solution and slow down or stop the repossession process.

Keeping on top of secured loan repayments

It’s always possible to turn things around – but only if you face up to the situation. Here are just a few ways you can prevent the situation from getting worse if you’ve missed a secured loan repayment:

  •  Budgeting

Most payments to secured loans are a set amount, at least for certain amount of time, so it’s easy to know how much you need to pay. Set aside that amount of money each month to make sure you aren’t caught short when the payment date comes around.

  • Secured debts come first 

If you are struggling to pay off multiple debts, it’s smart to make sure you pay any secured loans you have first. This way, you’re less likely to reach the stage where your belongings are seized.

  • Speak to the company

If you’re worried that you aren’t going to be able to make a payment, contact the loan company to discuss your options. They may be able to adjust your plan to make it more affordable for your circumstances.

How to get help?

Call us now for instant free debt advice or complete the contact form.  We can start to work through your debt problems from the moment you contact us and our friendly, professional debt advisors are trained to give you the best advice for your situation.