Getting a secured loan cheaply and safely

How much to borrow?

Get a handle on your existing debts first; list them on a piece of paper. Once you know the secured loan rate, draw a line across the page where this fits in. The secured loan should only be considered to pay off the more expensive debts above the line.
Don't feel all debts should be consolidated into one. This is a common secured loan sales pitch, yet in isolation it serves no real purpose. Remember, if you're repaying a higher rate or for longer, they make more cash.

You're converting a fixed rate into variable rate debt

While most unsecured loan interest is fixed for the life of the loan, secured loan rates are usually variable and can shift both with UK base rates and for the lenders' own reasons – check the terms.
If you're considering converting fixed rate debt such as a standard personal loan into variable rate debt, always ask “could I afford the repayments if rates increased?”. If not, don't do it. Don't throw surety away. Some secured loans offer rate fixes, but usually only for a limited period; and do always check there are no penalties for paying off your existing debts early, something common with unsecured loans.
Finally, don't borrow more than you need. Disgustingly some lenders tout, “why not borrow a little more for a holiday? You deserve it.” Don't do it. Never treat secured loans lightly, take as little lending as possible.
And most importantly if you think you won't be able to make the repayments, don't even start down this route, it isn't worth it - see the free debt cousellors instead.

How long to borrow for?

Budget to work out the maximum realistic amount you can commit to repaying, use the Budget Planner to help. Don't underestimate or it'll take longer to repay, costing more interest; and don't overestimate or you may overstretch yourself, risking your home. Careful planning is crucial.

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