About... Restructuring Your Finances

If you have not already tried, it can pay to investigate agreeing new, more affordable loan agreements to replace your existing loans, credit cards or HP. Sometimes this can be possible without changing lender by simply finding out whether the term of the loan can be extended.

However, if you have problems obtaining an unsecured personal loan (or if you find that the payments are prohibitive because most loan terms are restricted to 5 -7 years), it may be beneficial to arrange a secured loan. This could be done either by arranging a Further Advance with your existing mortgage lender or by taking out a separate "2nd charge" secured loan with a new lender.

Although your home may be repossessed if you do not keep up repayments on a secured loan, a secured loan can often be arranged over a longer term than a personal loan, making the repayments more affordable. At the same time, a secured loan does not have to be arranged over the same term as your main mortgage meaning that you could opt for a term that is between that of an unsecured personal loan and your mortgage. This could avoid repaying your debts over too long a term and/or increasing the amount of interest you pay by too much while still getting an affordable repayment to allow you to protect / rebuild your credit rating.

Secured loan lenders can often be more flexible when looking at previous payment difficulties than unsecured personal loan lenders. This could mean that, even if you have been refused a personal loan, we can direct you to a secured loan lender who will look favourably at your application.

Most importantly, it could prevent you from having to pay any early repayment charges on your current mortgage or being forced to switch your current mortgage to a less attractive rate than you are currently on.

Do not make repeated applications for credit once you have been declined. Each application you make is likely to result in a search of your credit report. These searches will be registered and could affect future applications. Establish why your application was declined before making further applications. see WHAT TO DO IF YOU'VE BEEN REFUSED CREDIT

Return to Alternatives to Debt Consolidation or Request Advice on the best option for you.