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What should I check if consolidation introduces security?
Replacing unsecured balances with a secured agreement changes what may be at risk, not just the rate.
Identify the asset, security terms and consequences under local law.
Keep the risk comparison separate from the payment comparison. Independent qualified advice may be needed before converting ordinary debt into an obligation supported by a home or another important asset.
Understand your preliminary loan result
Definitions
- Security
- Asset or interest supporting an obligation under the agreement, with consequences determined by its terms and applicable law.
- Guarantor
- Person who takes on obligations described in a guarantee; the extent of liability must be read in that agreement.