Secured loans cause more grief than mortgages.  The secured loan company gets very twitchy if you miss a payment, because if you were to lose the house months later, they might not get their money back.   The law is that the first mortgage MUST be redeemed in full by the sale of the property, but any second secured charge does not  have this protection.   

 

So they are VERY proactive in packing you off to court and they are not too sympathetic along the way.  SPML, Blemain, Black Horse, Norton, First Plus, Picture Loans - hang on - aren't they the ones that bombard you with adverts, especially during daytime television?  The very same, but they are not quite so pleasant and reassuring when you miss a payment.

 

They will be quick to call you and send you letter, alerting you to the default.  Fair enough, but, what's this?  An Income and Expenditure Statement to fill in to show your ablity to pay.  I bet they didn't send you that before they lent you the money.  I bet they didn't do a proper valuation and I bet the value came up really high, enabling them to justify lending you the max.

 

Okay, some prime lenders have lent at 100% or more (notably Northern Rock) but it was very clear that you were mortgaged up to the hilt.   If you have a mortgage and a couple of secured loans, you are probably mortgaged up to the hilt in terms of the total amounts you owe in relation to the current value of your home.

 

So it may be the secured loan that will finish you off, not the mortgage.  Often the mortgage lender does not hear that a house has been repossessed until it's all over, as it's the secured loan company that evicts.

 

Sometimes a secured loan can be 'rearranged' at court using a Time Order which is a way of asking for the court for more time to pay.  The amount you pay, the number of years and occasionally the interest rate may be varied.  But a time order can only be used if your credit agreement is regulated by the Consumer Credit Act 1974. This covers credit agreements which were originally up to £15,000 if you took the loan out BEFORE1 May 1998.  If you took the loan out AFTER 1 May 1998 then the loan can be up to £25,000 and still be covered by the Consumer Credit Act.

 

So fish out your paperwork and check.  This has to be done by the court but it could save your home, or at least buy you some time while you consider you options.

 

So 'secured' loans are secure for the loan company, not you.  What's that advert with the guy on an island waiting to be rescued - isn't that how you feel now?  Well, don't wait for them to rescue you, they don't care.

 

If you need help with a Possession Order for a secured loan, contact Citizens Advice.  Give us a call if you want to be rescued permanently from this loan without losing your home.

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