But debt has a lot of disadvantages; you are spending someone else's money, which you will have to return, eventually. And debt doesn't come cheap either; the interest rates that are offered by some companies may increase the gravity of your financial situation.



Debt consolidation or secured loans are an alternative if you are struggling.

Start with banks and well known credit unions. When you begin to research loan brokers, first start with your current bank, or with large credit unions. These are institutions with solid reputations, so scamming will not be an issue. Although may not get the best rate with a large bank, the security you receive can offset this.

Be wary of promises of getting a cheap secured loan quickly. Many borrowers are told that their deal will finalise within a particular time. They don't make payments on existing debts, in anticipation of the new loan.

After several delays, they are in default, with no money from the new loan. Then the loan company orders new credit reports, and charges you higher fees, and a higher rate, because of the delinquent loan, which resulted from delays caused by the company themselves!

Before you get your secured loan, consider this advice; you need to buy a roof over your head, get health insurance, save up enough money for a year off work, pay off outstanding debts, and secure your kid's education. After all that you can consider fooling around with what's left. Doing anything else jeopardises your future.

It is necessary to understand every word of your agreement before you sign, including terms and conditions, because a loan may become too expensive, with variable interest rates and other fees.

The total cost of your secured loan will depend on the annualised percentage rate (APR). The annualised percentage rate takes into account the whole interest amount, and all charges.

If you call your company about your loan, make sure you get the full name of the person with whom you speak. Big offices are impersonal; your loan officer could leave tomorrow.

For someone who believes in 'play now, pay later' a secured loan can be the second or third step on the road to homelessness. Consider carefully what you want the loan for, and how you're going to pay it back.

Personally, I'd only get a secured loan to:

- Set up a business I'd carefully researched;

- Buy a good education for a scholarly child;

- A medical emergency;

- To pay off a credit-card or other high interest loan.

Getting one for any other reason: home improvements, holidays, a new car, binds you into servitude for a good whose value declines as soon as you've bought it.

Don't be conned into getting a secured loan to make improvements to the property you're already living in; not all 'improvements' add to the value of a property, and even if they did, you can't realise that value unless you sell the place.

In the meantime, you'd be paying hundreds of bucks in repayments and interest per month, and scrimping on treats, or even necessities!