Tuesday, March 06, 2007
Some people seem to be rather worried about secured loans and the secured debt consolidation loan industry. I have to admit I've never really understood why. I've just taken out exactly one of those mortgages myself. By using the security in the house in the UK I've been able to buy the house in Portugal. What's wrong with this? I'm simply leveraging my assets which makes perfect sense as far as I can see.
You can also use the same sort of system to consolidate debts. Because there is now security against the borrowing you'll find that the interest rate being charged is significantly lower: imagine you were over your credit card limits and the like: moving from nearly 30% interest to the mortgage rate of 8% is obviously going to cut the pain of the repayments.
If this is the sort of thing that might interest you you can compare loans here.
Now it's important to remember that borrowing ever more money really isn't the best solution: at some point outgoings need to balance against income. But loans that either cut the interest on your debt, or that help you to leverage assets, seem entirely sensible to me.
Posted by Tim Worstall at 9:57:00 am