How combining your debts as a homeowner could lead to a clear financial future

Having any debt can cause anxiety, but if it’s from multiple different sources, it can be difficult to manage them all. They might have different payment dates, and high interest rates can mean you end up paying far more than you borrowed in the first place.

If you want a clearer financial future, it’s worth considering debt consolidation. This is where you take out a separate loan specifically to pay off all your existing debts, giving yourself just a single debt to repay, with a more manageable structure and lower interest payments.

Why does debt feel overwhelming?

Having multiple debts across various credit cards, loans, and overdrafts can quickly become overwhelming. With different payment dates and interest rates, you constantly have to weigh up which ones take priority. To make your life easier and reduce any financial anxiety, we recommend consolidating your debts into one secured loan.

By having one larger loan to pay, instead of multiple small ones, you can manage your money more effectively and have better oversight of your spending. It’s also worth noting that with UK interest rates on the rise, it’s more important than ever to evaluate your borrowing.

What is a homeowner loan and how does it work?

A homeowner loan is a type of secured loan which gives you access to larger sums of money by using your home as collateral. By securing the loan against your home, the bank views you as a less risky investment. That means you can borrow more money at a lower interest rate, which is great if you need some extra cash.

Many people choose a homeowner loan to consolidate their debts, but others decide to make certain home improvements or fund other large expenses.

Benefits of consolidating debt with a secured loan

Using a secured loan to consolidate your debts has a few key advantages, including:

One monthly repayment

Instead of multiple payments throughout the month, you only have one date to remember. This is extremely useful, as you can plan around this date, rather than juggling multiple repayments each month.

Potentially lower interest

As a secured loan, you’re likely to get lower interest rates than your existing debts. In other words, you’ll pay less in the long run.

Longer repayment periods

While your current debts might only offer a short time to repay them, a secured homeowner loan has a much longer repayment period. That also means you probably won’t need to pay as much each month, giving you better cash flow and a good overview of your financial obligations.

How to take the next step

Before you can take out a secured homeowner loan, there are a few steps you’ll need to follow.
First, we recommend checking your credit score with services like Experian or Equifax. This can help you find out which loans you might be eligible for. Next, gather your paperwork on all your existing debts, so you know how much you’ll need to borrow. Finally, contact an FCA-authorised lender, as these experts are registered and safe places to borrow from.

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Adam Regan

Deputy Editor

Features and account management. 3 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com