Secured Debt Consolidation Loan

And we get it, you may have heard of bad things being said about loans, but most of it is myth and misconception. The truth is that a lot of successful entrepreneurs and businesses started with a loan product. With the right information on how to manage any loan product, you can achieve your dreams without struggle.

What is a secured debt consolidation loan?

First, it is important to understand that debt consolidation refers to a form of debt refinancing that involves taking a new loan to pay off several others that are likely to be overdue. Therefore, a secured debt consolidation loan is a personal finance facility that is extended to a borrower against a personal asset. In other words, you can easily get approval for this loan if you show proof of an asset that you own personally. 

You must have full ownership of the asset in question because it acts as security for the amount of money you receive. In the event that you are unable to pay the loan according to the terms stipulated, the financial institution responsible for advancing the loan to you is free to cease the asset and sell it off as a way to recover the amount owed. 

In most cases, the lender will require you to produce an asset that is of a higher value than the amount you wish to receive. This is perfectly reasonable considering the intricate details that may be involved in case of default. It is worth pointing out that once you agree on the terms of the loan, you will be unable to sell the asset in question until you settle the pending loan.

What are the benefits of a secured debt consolidation loan?

Understanding some of the benefits of a secured debt consolidation loan is key to appreciating why it may be an excellent financial product for your personal needs.

Low-interest rates 

Because secured debt consolidation loans are given against an asset of a higher value, the lender’s risks are greatly minimised. As a result, the lender will be more than willing to advance the money to you at lower interest rates. In fact, if the asset is of high value and one that is in demand, you are likely to have lenders scrambling to advance the loan to you. In the end, you are able to negotiate better terms on the personal loan for debt consolidation. 

Room to breathe 

Few things can be as stressful as knowing that some of your loans or debts are maturing, yet you have not yet raised enough money to repay. In most cases, late payment on debt will negatively affect your credit score and lead to higher repayment rates. A secured debt consolidation loan offers debt relief because it enables you to settle outstanding loans or debts within the right time. As a result, you will be more relaxed in mind knowing that you don’t have to deal with penalties and bad credit scores.

Larger loan offers

Before a financial institution advances any loan facility to you, it carries out some background checks. Once that is complete, they will set an amount according to your worth. If you have an asset such as a home, you are likely to get larger loan offers at low-interest rates. That is because the financial institution does not have to worry about risks.

What are the steps to obtain a secured debt consolidation loan?

Here are some of the steps you can expect to go through when trying to get a secured debt consolidation loan.

1. Requirements 

The first thing you need to do is find out what the particular institution requires. In most cases, you must have obtained 18 years of age. You must also own an asset of value with some examples, including a home, an automobile, electronics and even savings in an account.

2. Submit an application 

You can pay a visit to your prefered financial institution or apply online. Make sure to provide accurate information in your application form because this will be used to analyse your worthiness. A debt consolidation loan calculator is often used to determine the most reasonable amount to lend. The amount you receive is likely to be relative to the value of the asset you use as collateral.

3. Wait for approval

The lender will assess your application, determine the amount of money you can receive and give feedback within a stipulated period of time. If you agree to the terms, you can quickly close the deal and have the money deposited into your account of choice.

Why choose Ozzie Loans?

If you are thinking of getting an unsecured or secured debt consolidation loan, look no farther than Ozzie Loans. We are a leading financial institution that provides some of the most reasonable loan products and financial advice to ensure peace of mind for you. For any questions or concerns, don't forget to get in touch with us.