Can an Unsecured Loan Be Turned into a Secured Homeowner Loan?

Yes, by borrowing money in the form of a secured homeowner loan and paying off the unsecured loan.

Whilst you can’t simply decide to secure an existing unsecured loan against your home, you can choose to pay off the unsecured loan by taking out a secured homeowner loan. Many people use secured homeowner loans to raise money to consolidate a range of debts including unsecured loans and credit cards.

There are several advantages to taking out a secured homeowner loan rather than an unsecured loan. Firstly, you may be able to borrow a larger sum of money over a longer period of time. This may allow you to fully repay your unsecured debts and it may save you a significant amount on a monthly basis.

Secondly, you often find that you simplify your finances by having one affordable, monthly payment on a secured homeowner loan rather than lots of smaller payments to unsecured loans and credit cards.

Finally, you may find that you get a much lower interest rate on a secured homeowner loan than you do on an unsecured loan. This is primarily because a lender has the security of a legal interest in the proceeds of your home when it is sold.

Bear in mind that should you decide to repay your unsecured loan by taking out a secured homeowner loan that you will be putting your home at risk if you fail to keep up repayments. A lender cannot force you to sell your home or attempt to gain a repossession order if you fail to make payments on an unsecured loan. However, if you decide to repay your unsecured loan and take out a secured loan instead, failure to keep up your repayments will put your home at risk.

You may not be able to simply ask your lender to secure your unsecured loan on your home. However, there are ways in which you can ‘turn’ your debt from an unsecured into a secured homeowner loan.

To use your home to raise money at a competitive APR, please fill this homeowner loan form.