Tuesday, 10 May 2011

Secured Loans - Debt Advice And Support

Secured loans require a person to sign something in their possession against the loan. The reason it is called a secured loan is because the creditors can take possession of that which the credit was taken against if the loan repayments are not made.

When people secure credit against an asset they are generally able to get more in return. An example of this would be when someone takes out finance against the equity they own in their property. They could find that at time they are able to apply for more money than they would if they weren't to secure it against the property. This is usually because the creditor feels that the person is less of a risk and they will be able to recover the amount owed if they fail to make payments.

Many people have seen the benefits of secured loans and have managed to pay back what they owed without having their possessions being reposed. However this isn't always the case and in some instances a person can find themselves struggling to manage their finances if they lose a job or have other personal problems.

The main disadvantage of secured credit are those people who do not manage to pay back what they owe may find themselves at risk of losing their assets. Sometimes the temptation of a large sum of money can be too much to resist. This is especially true of those who have refinanced because they are in debt and unable to find another solution which could help them.

Those who have refinanced in order to repay other debts can find themselves owing even more than they did originally. There is a number of debt solutions which can help those who have found themselves in this situation. When trying to asses which of these solutions is most suitable it is advised to speak with a debt advice charity/company. The solutions which can help are;

General Advice - This is best for those who may need to cut back on expenses but are not suitable for any other help 

Debt Management Plan - this can arrange for regular payment to be made to the creditors

IVA - For those who are unable to pay back what is owed in full but is not suitable for bankruptcy. This is only available to people living in England, Ireland and Wales.

Protected Trust Deed - Similar to an IVA but is only available to people living in Scotland. The main difference is simply the criteria needed to meet the requirements for these solutions.

Bankruptcy - The final solution when all else fails is to petition the court to legal declare bankruptcy. This is only available in England, Ireland and Wales 

Sequestration - This is the same as bankruptcy except only available in Scotland. The only difference between these solutions is the criteria which is required to meet them.

LILA - A new debt solution which has been introduced to help people who could afford the cost of making themselves bankrupt, still manage to be declared insolvent. This is only available in Scotland

Debt Relief Order - Same as LILA except for the criteria need to be met. This solution is only available in England, Ireland and Wales.

The trade association whose members account for approximately 98% of all UK mortgage lending has stated that new house loans returned to the same levels as December 2007 levels. In addition, the remortgage market has seen a stabilisation of growth over the same period of time. According to data published by the Council of Mortgage Lenders, the number of loans that went to home movers rose by 15% from September to October 2009. A significant number within that group opted for a tracker mortgage loan, a loan where the interest rate rises and falls in line with the Bank of England base rate. This is believed to be an indication in borrower confidence that rates may remain low for the long term.


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