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Secured loan debts. What can happen to my home

A secured loan is a loan attached to your home. If you’re unable to pay the debt, the lender can apply to the courts and force you to sell your home to get their money back.

Because lenders have security of your property, they may offer much lower interest rates than on other types of lending, or they may lend to people with a poor credit history who wouldn’t get an unsecured personal loan. You may also find that you can borrow more through a secured loan than you can through a personal loan

If your circumstances change and you miss payments to a secured loan, you could lose your home.

You may have seen adverts for secured loans on TV. They're often advertised as debt consolidation loans, a way to put all your existing debts into one loan. All of this might sound appealing, but it comes at a very high risk.

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Secured loans and debt consolidation

Many secured loans are offered as a way to consolidate your existing debts. The interest rates are often lower than unsecured personal loans because the risk to the lender is reduced when the loan is attached to your property. 

The lower interest rates for a secured loan can make them seem like a good option for debt consolidation, however if your situation changes and you can't afford to pay the loan, the creditor could take action to repossess your property.

If you're considering consolidating your debts it could also be a sign that you're finding it difficult to pay your existing debts. In this case we'd recommend getting expert debt advice on your available options before securing a debt to your home. 

We can help

If you’re struggling to pay your debts and are thinking of taking out a secured loan please speak to us first. We can provide expert debt advice to find a better way to deal with your debts, rather putting your home at risk.

Our free debt advice is tailored to your personal situation, use our online debt advice tool or contact us (free from all landlines and mobiles).

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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© StepChange Debt Charity 2019