Debt Consolidation Homeowner Loans

If you are looking to borrow a significant amount of money and you are the outright owner of your home, then you might be eligible for a homeowner loan.

Homeowner loans let you use your home as collateral against the money that you borrow, allowing you to consolidate your debt into one manageable chunk.

Let’s take a look at what homeowner loans are and why you might want to take one out.

What are homeowner loans?

Homeowner loans are otherwise known as secured loans. You’re only able to apply for a homeowner loan if you own your home outright, as they are taken out in equity against a property.

Homeowner loans are often seen as a way to consolidate debt, as securing this loan against an important piece of property, such as your house, enables you to borrow a large sum of money, usually as much as £100,000 in some cases.

Payments are made over an agreed period of time, but this can be as long as 25 years in certain circumstances.

Of course, this isn’t a loan you just want to take out with little thought. While this can be a large loan and potentially help solve your debt problems, it also comes with significant risk.

If you default on your payments, you can lose your home.

The advantages of taking out a homeowner loan

But for many, the rewards of a homeowner loan very much outweigh the negatives. Here are the major advantages of taking out a homeowner loan.

Consolidate your debt

The primary benefit of taking out a loan against your home is the ability to consolidate all of your debt into one place. This is particularly useful for anyone with a large debt that’s spread over multiple creditors, with varying interest rates and payment terms.

Consolidating your debt into a secured loan allows you to make repayments regularly, but in one place, for one amount. This helps to loosen your financial constraints and provides a much less confusing repayment scheme for you to concentrate on.

Less risk for the lender

If your credit history isn’t up to scratch, then you will have a lot of trouble trying to take out an unsecured loan. Lenders want to know that they have some collateral, especially if you already have debt.

If you’re taking out a homeowner loan, there’s much less risk for the lender, as they have that collateral. For that reason, homeowner loans are a lot easier to take out than other types of debt consolidation loan.

Lower interest rates

One of the biggest benefits of a homeowner loan is the fact that you can negotiate lower interest rates, in comparison to your existing loans.

This can free up valuable cash for you each month to spend on necessities and save money in the long term.

You can borrow large sums of money

Importantly, using your home as equity allows you to borrow large sums of money in one go. This can be indispensable, and few other loan types are likely to provide similar quantities of money.

The amount of money you can borrow is significant, but of course, you need to look at the pros and cons of a homeowner loan before rushing into one, as your house will be at risk.

If you’re interested in consolidating all your debts as a secured loan, then you can find out more information by enquiring with Debt Consolidation Loans. Our friendly, expert staff are happy to help you today.

Why is it worth Consolidating ALL your Debts into one Loan?

  • You can control your monthly budget
    A loan will help you manage your personal finances, as it’s only one payment – not many. 
  • Reduce the total amount you owe
    If the combined total interest of all your debt is higher than having one loan interest rate, you will actually save money.
  • Improve your future credit score
    You can take the opportunity of having one payment each month to prove that you are a responsible borrower. Therefore, it will have a positive effect on your credit rating.

 

Are there any risks?

Debt Consolidation Loans aren’t for everyone. It’s important to bear in mind that, because you’re both signing the agreement, you’re equally responsible for repaying the loan. If payments are missed or you stop paying before the end of the agreed term, both of your credit scores could be affected.

Entering into a financial agreement of any kind with a family member – no matter how close you are – is always a big deal, therefore it pays to have an in-depth chat about the idea beforehand so you can both make an informed decision. Also, make sure to carefully determine your debt consolidation plan before adopting it.

Contact us today

We’d love to help you move towards a debt free future. Our friendly team will offer no-obligation advice and answer any questions you might have about joint debt consolidation loans – just call us today.

If you are facing serious money issues, for free impartial advice money advice service 

Why is it worth Consolidating ALL your Debts into one Loan?

  • You can control your monthly budget
    A loan will help you manage your personal finances, as it’s only one payment – not many. 
  • Reduce the total amount you owe
    If the combined total interest of all your debt is higher than having one loan interest rate, you will actually save money.
  • Improve your future credit score
    You can take the opportunity of having one payment each month to prove that you are a responsible borrower. Therefore, it will have a positive effect on your credit rating.