Introduction
Although Secured Loans also have their place in the mainstream market and in certain circumstances can be useful for high value, long term, quick turnaround loans for people with good credit ratings they are typically used by people who have struggled to get extra credit using conventional means. This document talks about the organisations people can turn to if they experience bad debt problems. As taking out a secured loan is a huge financial commitment and people seeking to take them out typically already suffer from an adverse credit rating, it is advisable to talk to at least one of these organisations or at the very least visit their websites prior to taking out a secured loan.
The Citizens Advice Bureau (CAB)
At the time of writing the Citizens Advice Bureau (CAB), funded by charity, has around twenty one thousand volunteers offering telephone advice, on the Internet or at its 3,400 'drop in centres' spread across Britain. The Citizens Advice Bureau is no stranger to dealing with people looking at Secured Loans and late last year produced a comprehensive report detailing what it saw wrong with the selling of Payment Protection Insurance (PPI) for Secured Loans. At the same time it reported to the FSA, OFT and various Treasury committees to get a better deal with consumers for insurance. As recently as May 2006 it also produced a report entitled 'Deeper In Debt' which discussed the problems their clients faced when coping with debt. Since that date the FSA has responded by issuing judgements against the industries handling of payment insurance.
One of the major advantages CAB has over other Debt counselling advisers is how easy it is to get in touch with them. You can literally just pick up the phone for a quick discussion or call into one of their local advice centres. The CAB also has a very detailed website that contains a Frequently Asked Questions (FAQ) section, advise on how to cope with Debt, where to get the best deals on credit, how to give yourself a financial health check and where to go for further advice.
The CAB is also renowned for its excellent fact sheets and with regards to Secured Loans produces them for advice about County Court Judgements, problems with keeping up Mortgage payments, negotiating with creditors and provides a jargon buster. It also has a series of sample letters that can be used to help getting debts suspended or used to negotiate a re-payment plan.
The Consumer Credit Counselling Service
Whereas the CAB deals in general advice the Consumer Credit Counselling Service (CCCS) specifically deals with coping with bad debt - so is ideally placed to offer advice on Secured Loans. Although it is physically less accessible than the CAB, as it only has eight operational centres, it does provide a free phone number - 0800 138 1111 - where you can get specific and immediate advice. For those who don't like talking to someone in person they can also be contacted via email.
Perhaps it is the sign of the times that the CCCS founded at one centre in Leeds in 1993 grew to 4 centres in 1996 and now have 8 dedicated centres and two satellite sites, one in Northern Ireland and one a partnership with Direct Debt Line in East Sussex.
The CCCS is a registered charity and is fully funded by the Credit Industry. As is the case with the Citizens Advice Bureau it has a website that provides full details on how to cope with mounting debt problems. Unlike the CAB it is specifically targeted at people with financial difficulties.
The National Debt Line
The National Debt Line was set up in 1987 to provide purely telephone self-help guidance for people with credit and debt problems. All their advice is free, confidential and entirely independent and they can be contacted on 0808 808 4000. The National Debt Line is funded by the charity Money Advice Trust that is in turn funded primarily by the large players in the credit and finance sector. Most of these are also some of the larger players in the Secured Loans market like Barclays Bank, GE Capital Bank, Lloyds and Paragon. Even though the National Debt line is funded by these organisations they in no way have anything to do with its day-to-day operation.
National Debt Line will also provide on request a selection of Self-Help packs and fact sheets most of which are relevant to someone looking for a Secured Loan. As the service is telephone based their website is limited to information about the Agency only, but for a brief guide outlining how they operate it is well worth a visit.
Conclusion
If anyone is struggling against debt and needs credit advice prior to taking out a secured loan it is advisable to contact one of these organisations. The Citizens Advice Bureau because of its easy accessibility may be the best place to start, but for specific advice on taking out loans and whether there is another way of doing things it may be advisable to go to one of the specialist agencies like The National Debt Line or The Consumer Credit Counselling Service. Surprisingly both organisations are not that well known but both offer comprehensive advice on bad debt and, quite poetically, they are both funded either indirectly or directly by the organisations providing secured loans. Another alternative is to ask for a consultation with a Financial Advisor. Most Financial Advisers offer at least half an hour 'free consultation' and there are also some websites that offer Vouchers against the cost of consulting one. There is a growing trend for loans Companies to mask themselves on websites purporting to be financial advice sites and it is strongly recommended that you carefully study all sites before seeking its financial advice.