Could A Secured Loan Help Relieve Cash Advance and Credit Card Debt?

Would you risk your home or car for your cash advance or credit card debt? People who look to secured loans in order to payoff unsecured debt are doing just that. The fear of having credit scores lowered has created more debt problems. As often as these choices do work for some people, we all need to keep in mind the possibility of losing property and still have credit tarnished with negatives.

Moving cash advance and credit card debt

Take a look at one scenario which transformed unsecured debt into secured and all went well.

• A couple decided to make an impact on their financial futures. They both had secure jobs, a home mortgage and a pile of credit debt. They worked with their financial adviser and set up retirement plans and decided to lighten their monthly payment load by refinancing their home mortgage. They were able to keep their low 5.5% interest on their home loan as well as add their credit debt to the balance. The process took a few weeks, but in the end, they were able to save hundreds of dollars each month previously spent on credit card and cash advance debt. With this extra money, the couple was able to begin placing extra into their savings account for future emergencies as well as quickly build their retirement accounts.

Unfortunately there are many more examples of this strategy gone badly.

• Not everyone has two incomes to help build a savings; then get back into debt dealing with financial emergencies.
• Not all jobs are secure. The loss of a job is detrimental to long term and short-term plans.
• Some people will have to take out a second mortgage instead of refinancing the initial loan. A second payment towards the house can be just as demanding as the original debt, but now the home is at risk.

Those who are not homeowners or do not have strong enough credit history for bank supported loans end up looking for other options. Car title loans are one other secured option which can bring a good chunk of change in to fix current money problems. Depending on the value of the vehicle, thousands of dollars may be processed to help relieve debt or take care of an emergency. The tough road is not safe for long when the 30 day loan term ends and the full amount is expected to be returned plus fees. If you don’t have the money now, how can you be so sure you will have it in 30 days? Title loans carry high interest rates and the title to the vehicle is used to secure the payoff.  Think long and hard before choosing this option.

Unsecured debt like cash advances and credit cards are often the problem.

Cash advances are small loans with even shorter term limits. This money is best used to bridge the gap between emergency and payday, not to pay down other debt. It is only cost effective when used properly and paid off quickly. Using credit to pay off debt may help if you can transfer debt onto lower or zero interest accounts. Pay off any transferred debt quickly in order to save from the promotional rate.

Don’t put your property at risk in order to clear up debt. Talk to a debt counselor or a financial adviser for a financial plan which will support your situation with minimal risks.