In the UK today, the last thing that one can imagine is having a poor credit score. No lender will want to get associated with you because of the high risk involved. Though many people have found themselves in this situation, there is a way out; taking a secured loan and consolidating the smaller credits. Here is a case of Lillian Antonio from London who used a secured loan to set her finances straight and march to financial freedom.
How Antonio’s credit score sank to the lowest point
In the summer of 2015, Antonio took a loan from her bank to start a baking business. Three months later, she fell ill and got dismissed from her position as a supervisor in a local supermarket. The business she had started stalled as the medical bills took all the cash she had.
About 6 months later, she took a logbook loan to try and fill the financial gaps. However, the repayment also became difficult because her business did not grow as expected. The logbook lender came for her car and gave Antonio one month to clear the loan or have it auctioned.
Though she had already recovered, her job was lost, and she had two loans on her shoulders. This was not all. She also had a college loan, credit card loan, and normal expenses to meet. Having defaulted on all loans, Antonio credit score sank to the lowest point.
The decision to consolidate the debts with a secure loan
After finding everything was falling apart, Antonio was advised to visit a financial advisor in London. Notably, she realized that her situation was not as dire as other people who had gone to seek help. That was the time that Antonio realized that she could overcome all the financial troubles she was going through.
The financial expert advised Antonio to take a secured loan and clear all the outstanding debts. Using her house in London, she took a secured loan against her house and cleared all the loans. She was left with one single loan that had a lower interest rate and subtle monthly repayment. It was a great relief. However, the cash was not enough to boost her job back to competitive level.
To regain full control in her business, she sold her car and used the cash to acquire new baking machines and acquired a website. She also marketed the business more aggressively in the neighbourhood. To keep the cost of operation lower, she called her sister to assist administrating the job online while she handled deliveries.
By the end of 2016, Antonio had cleared 50% of the secured loan, and her credit score had improved by a great margin. Today, she is almost clearing the loan, and the business has continued to grow from strength to strength. Her emergency fund is rapidly growing, and she also has a medical and business insurance.
What you need to know when consolidating debts with a secured loan
- Understand that you have only cleared the smaller loans, but there is a larger loan to deal with. You cannot relax thinking that the bigger problem is gone!
- Personal repayment capability is very crucial when taking any loan.
- As you work on clearing the loan, do not forget to set aside funds for an emergency because issues can still emerge on the way.
- Seeking expert assistance is very important. Remember that you do not only need the expert assistance only when in trouble. Make the expert a close friend and all the decisions you make will lead to prosperity.
While getting into financial trouble may at times appear inevitable, everyone can triumph. Most of the richest people started with a lot of troubles before rising to the top. All you need is to understand the personal situation, seeking help from experts, and being consistent in addressing the problem.