Secured Loan Debt Help & Advice


Secured loans can be a vital part of a person’s life, allowing them to buy their first home or that new car they so desperately need. These can be a great way to get large amounts of cash with a lower interest rate for your repayments.

In this guide we’ll examine secured loans, from what secured debt is and how it differs from unsecured debt, to the best ways to keep up with loan repayment and avoid serious debt problems.



What is a secured loan?

The difference between secured and unsecured debt (like payday loans, for example) is that secured debt is a loan secured against one of your assets, like your home.

This can have serious consequences if you fall behind on repayments over your loan term.

Failing to keep up with payments on a secured loan can lead to the company applying to the court for repossession of the asset it was taken out against.

This, understandably, causes high levels of stress and will cause serious damage to your credit score.

To add all of this, if a repossession takes place, it doesn’t always mean the debt is cleared. If the value of your home doesn’t cover the balance you owe, the lender is within their right to recover the remainder of the debt.

Write off up to 70% of your unsecured debt – Check if you qualify

What are common types of secured loan debt?

A secured loan is any form of loan that’s secured against an asset like your house or car. Below are some common examples of secured loan debts.


The most common example of a secured loan is a mortgage. With a mortgage, you take out a loan to purchase the property from a mortgage lender or credit broker, and repay the money you borrowed through a series of monthly payments.

If at any point you come into an amount of money that you want to put towards paying off your house, it is possible to pay off your mortgage early, although you may face repayment charges.

Because your mortgage is secured against your house, the property will be under threat if you continually fail to keep up with your mortgage payments.

It’s within the lender’s rights to pursue court action, in the form of a court order, to repossess your home and sell it to recover your debts.

Second charge mortgage

By paying your mortgage, you gradually build up equity in the property – the percentage of the home you own outright.

If you have enough equity in your home, you might consider taking a second charge mortgage, in which you use the equity in one property as collateral for a loan to buy another property. The issue with these types of mortgages, however, is that defaulting on payment could put both homes at risk.

Why do people turn to secured loans?

The most common reason people will take on a secured loan is to help them buy large luxury items such as a house or a car. Generally, most people are able to keep on top of this because secured loans are considered a priority payment.

For some, they will take on secured loans to cover costs for larger expenses such as home improvements, starting a business or even a wedding.

However, this may be a last resort because they are unable to raise funds in a timely manner.

Many people also will take out this type of loan as a form of debt consolidation. With attractively low interest rates, it often seems like great option if you have lucked out elsewhere. Nevertheless, if your circumstances change and you become unable to make the payments, your possessions will be at risk of being taken.

A massive thank you

“I’d like to say a massive thank you to Carrington Dean for helping me. It feels like I have control of my life again.”

How can I avoid secured loan debt?

Everyone will come across a secured loan at one point in their lives, but there are things you can do to avoid falling behind on payments.

Prioritise your money

If you are paying off multiple debts, payments to secured loans should always be prioritised.

The consequences of defaulting are not worth the stress it will cause you, so set payments for these to the top of the list.

Set a budget for loan payments

Normally, secured loans are fixed, making it easy for you to keep track of how much you owe to it and what you need to pay.

This is good for setting a budget as you will always be able to set aside the right amount each month and ensure you never miss a payment.

Stay in touch with the loan company

If you are struggling with payments, it’s always best to keep the loan provider in the loop.

Contact them to advise of your situation, they will have options to help you and this can prevent them from taking further action against you.

Does secured debt affect your credit score?

Any secured loan you take out will appear on your credit history (also known as your credit report or credit file).

Your credit history is a document that carries detailed information on your financial history, including all loans and other significant financial transactions.

Whether a secured loan will impact your credit score is another matter. Your credit score is a three digit number that is monitored by the main credit reference agencies – independent financial organisations who are regulated by the Financial Conduct Authority (FCA).

The higher your credit score is, the more likely you are to get a loan or be accepted for a credit card.

While carrying a secured loan could benefit your credit score if you build up a track record of repaying in full and on time, any defaulted payments could lower your credit score and make it more difficult for you to access credit in the future.

Will a debt consolidation loan help me with my secured debt?

Debt consolidation loans are an informal debt solution that allows you to take multiple debts to multiple creditors, group them together, and repay them using another loan.

This makes your debt easier to manage because it provides you the money to cover the full loan amount to all your lenders, but you only have to worry about making a single repayment.

Like debts more generally, debt consolidation loans can be divided into secured and unsecured debts, and you can arrange for one through a debt charity or debt management company.

If you’re interested in a debt consolidation loan, visit the debt consolidation page of the Carrington Dean website here for more information.

Find out if you qualify to write off up to 70% of your unsecured debt!

Where can I get debt advice and more information on secured debt?

While secured debts make it easier for you to be accepted for a loan or mortgage, they’re not without their problems.

If you have a loan secured your home and money is tight, you could be left in the situation where lenders are threatening to come for your house.

Carrington Dean can help. We’re Scotland’s debt specialists. We have the knowledge and experience to help you deal with your secured loans and we can offer you free debt help that can help you protect your most important assets from repossession.

If you’re struggling with your secured loans or are facing repossession, contact Carrington Dean today for free debt advice.

We can help you work through your debt problems, no matter what situation you’re in. For free debt help, the phone number is 0800 043 1320.