Nowadays the banking industry finds itself in a rather difficult situation. It is getting harder and harder to find new customers, so lenders change their direction and adapt to the needs of their current customers – the ones that already have taken loans from them. Or they try to lure other banking institutions’ clients with a more modern version of refinancing – debt consolidation. This is a rather new approach which consists of taking a new loan in order to pay an older one, or to unite more loans into a single, more convenient one. The new contracts may be either unsecured or secured loans.

Of course there are some differences between secured and unsecured debt consolidation. On the one hand, the interest rate is higher in unsecured loans. So this may be a drawback. On the other hand, the approval process is faster in unsecured loans because there is no need for real estate evaluations or further documents signed at the notary office. However, sometimes the bank scoring may not allow the client to choose between one type and the other. In this situation the lender only offers the solution of secured loans.

Experts say that it is important that clients should try to obtain a debt consolidation loan from the same bank that gave them the first one, in order for them to avoid unnecessary additional fees for a real estate reassessment, for example. But if they succeed in finding a more profitable solution for their problem, they should not hesitate and move towards another banking institution. Lenders tend to become very generous with their customers just to get them to sign a contract.

Nevertheless, transforming multiple loans into one may presents some risks. Given the fact that each loan has a different repayment period, moving all in one credit may increase the total cost. Thus, before deciding to consolidate, one must not compare the current monthly effort with the new one, but the total amount that one pays over the years. If one has debts that are settled in a short period of time - in less than a year, a year and a half - it is pointless to include them in the debt consolidation process and extend the repayment period correspondingly to 5 -10 years.

When in search for information regarding secured loans for the process of debt consolidation people should try to get help from specialists. Not everybody has financial education and the terms presented in the contracts may be very confusing for a lot of people. That’s why it is advisable to turn to specialized help, coming from brokers. They address the banks in your behalf and try to present you with the best offer. In exchange for a fee they save your time and energy and come up with the most suitable solution for you.
When looking into the matter of debt consolidation http://www.blimeyloans.co.uk consider the possibility of secured loans http://www.blimeyloans.co.uk/securedloans.php.com