Why Shouldn’t I Just Get an Unsecured Loan and Keep My Assets Safe?
Unsecured debts are definitely much easier to manage but they also have a lot of limitations.
For example, you cannot borrow more than £25,000 using an unsecured loan.
Furthermore, since you’re not putting up anything as security, it may be very difficult for you to get one if you have a bad credit score.
Your lender will decide whether or not to approve your application based on your credit history, your income, how much you want to borrow as well as how long you want to borrow it for.
If you’re unsure whether you should get an unsecured or a secured loan, I highly suggest seeking advice from an independent debt charity such as National Debtline or StepChange.
Can I Get My Unsecured Debts Written Off?
Yes, it’s definitely possible for you to get some or all of your unsecured debts written off such as credit cards or a personal loan.
However, you will most likely have to enter into some sort of debt solution process such as an Individual Voluntary Arrangement (IVA) or a Debt Relief Order (DRO).
You can also get some of your unsecured debts written off through a full & final settlement offer.
For more information on how to get your unsecured debts written off, you can click here.
Can Unsecured Loans be Used for Debt Consolidation?
Yes, you can definitely use an unsecured loan to consolidate your debt.
You could use it to consolidate all of the debts you have such as credit card debt or personal loan(s), etc.
However, an unsecured loan can definitely have much more restrictions as compared to a secured one so you need to be wary of that.
For example, as I mentioned earlier, you can’t borrow more than £25,000 using an unsecured loan. Thus, this could only work if the sum of all your outstanding debt is either £25,000 or lower.
Be sure to look at interest rates of the loans you’re trying to go for and always opt for the one that has a lower one compared to the debt(s) you have currently.
For more information on how to apply for an unsecured debt consolidation loan, you can click here.
Secured debt can definitely be an effective way of financing a certain asset but of course, there are many risks involved with it.
If you’re considering going into secured debt in order to fund a home or a vehicle, I highly suggest you perform a financial assessment to ensure you can afford it before entering into an agreement.