Bit of a strange word, this one.
It actually, in some uses, can be a goos thing yet when you see it your subconscious gives you a little jolt, a small kick in the synapse that makes you twitch ever so slightly.
Unsecured can mean "not tied down", "no basis for confidence" or just even plain old "loose".
Hmm, not a very good or confidence improving set there then.
Okay - how about if I said unsecured in context to a loan then - would that make you feel better?
Well, it certainly should do.
You see, when you take out a loan to consolidate your outstanding debts, you will have to give some form of security to the lending / loaning company so that they have confidence the money they are giving you - you'll pay back.
This is based on the assumption that the amount you need to borrow is not small. I mean, if it was you wouldn't be taking out a consolidation loan would you - you'd just tighten your belt a bit and pay it back yourself.
So - the lender says to you "Heck, sure we can lend you $25,000 to get you out of schtuck sir, no problem. We'll even give it to you at a very low repayment per month on a long repayment plan - so you end up paying us extra in interest over the next 10 years too" (They probably won't say that last bit to your face, just think it - but it will be unspoken, believe you me!)
"Now then" they continue " do you want to secure that against your home, life insurance policy or shall we just take your first born child now?"
Ah - what could you possibly secure your loan against? Of course - the only thing you have which is big enough to be security - your home.
So they secure against your home and you sign the contract which states that if you default, they are entitled by law to take your house away and sell it to reclaim their monies owed. Not good!
So now you need to do some hunting. You need to find unsecured debt consolidation loans to work with, not secured.
Do they exist? They do - they are rarer than secured loans and hard to find from a reputable company, but they do exist. Looking online should help you discover one quickly. Conversely, if you can't find one, talk to an insurance agent - they'll be delighted to point you in the right direction.
BUT - and yes, I capitalized that to get your attention - be aware that having an unsecured loan will potentially save your house from possession but - you'll have to pay a higher monthly repayment each month and the company offering the unsecured loan may well want you to have or take out some form of life insurance cover with them as the first beneficiary for the total loan amount plus interest!
Still - which is better - paying more each month or lose your home? Easy choice, wouldn't you say?
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