Let's face it, in today's 'must have now' consumerist society, you wouldn't be the first to have more than the odd bit of credit lying around now would you? Things like secured loans for home improvements, unsecured loans for a car or two, credit cards for petrol and eating out and store cards for the sales. It soon adds up and eventually for many, it's going to get a bit of a hassle sorting each payment out each month. "Have I paid that one? Do I need to pay this one? What's the minimum payment on the card?" Sound familiar?

It's OK if you have the patience for this sort of thing and you know that financially, you can afford the repayments and know that you're getting a reasonable deal. Of course, back in the real world, most people haven't, can't and aren't, if you see what I mean? Debt consolidation could offer a handy way out of the mess and is one of the most popular purposes around for a secured loan.

Homeowners who have a mortgage may be able to get a secured loan for debt consolidation purposes. As property prices have continued to grow, homeowners have discovered that as they are paying off their mortgage, they are building up quite a handy some of equity in their property (that's the difference between what their property would be worth on the market and what they have left on their mortgage).

If you've been in your property for a number of years now and haven't remortgaged or taken out a secured loan in that time to raise additional finance, there is a good chance that you will have a nice little nest-egg tucked away in those bricks and mortar. This could be used to help you to successfully apply for a homeowner loan for debt consolidation.

But How Does Debt Consolidation Work?

The idea seems a bit strange at first but run with me. What you could do is to use some of the equity in your home to take out a secured loan, the value of which would be used to repay the outstanding balances of the array of credit you want to consolidate. So for example, you may have an unsecured loan for ?5000 and credit card balances of ?2000 and ?3000 respectively. Don't forget the store cards which add another ?4000 on top and you have a total of ?14000 of credit. Take out a debt consolidation secured loan for ?14000 and repay each of the balances leaving you with one loan for the same amount.

This means that you only have one loan and therefore one repayment rather than several making it that bit easier to manage your finances each month.

Another advantage might also be that the new secured loan may carry a lower APR than your existing credit and that you may be able to spread the repayments over a longer term which means that you will have to meet lower monthly repayments and therefore have more disposable cash available to you each month. Now that could make things a whole lot more manageable.

If you have a lot of unsatisfied credit and have equity available to use in your home, a debt consolidation loan may be just right for you.

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