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Secured debt consolidation loans

A secured debt consolidation loan can be an effective way to manage your ongoing debts and can even help you save money.

Compare secured debt consolidation loans

1 - 5 of 5
Name Product Interest Rate Loan Amount Loan Term Requirements Link
Loans Canada Personal Loan
5.40% - 46.96%
$300 - $50,000
3 - 60 months
Requirements: min. credit score 300
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LoanConnect Personal Loan
6.99% - 46.96%
$100 - $50,000
3 - 120 months
Requirements: min. credit score 300
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Fairstone Secured Personal Loan
19.99% - 24.49%
$5,000 - $50,000
36 - 120 months
Requirements: must be a homeowner, min. credit score 560
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Alpine Credits Home Equity Loan
10.00% - 22.99%
$10,000 - $500,000
Up to 60 months
Requirements: must be a homeowner, min. credit score 300
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Loans Canada Vehicle Title Loan
Loans Canada Vehicle Title Loan
0% - 29.99%
$500 - $35,000
3 - 96 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 300
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What is a secured debt consolidation loan?

A secured debt consolidation loan is secured against an asset (usually your home) and used to fold multiple debts into one, with more manageable monthly and/or overall costs. If you have outstanding loans, credit cards or other debts, it can often be difficult to manage and keep track of your ongoing repayments. By using a debt consolidation loan, you can merge your current debts and then only need to make repayments on the new loan.

Secured loans are a form of personal loan that uses the equity you have in your home as security against the cost of the loan. This means that a secured loan represents less risk to the lender than a regular personal loan, so you’re more likely to be approved, and will also potentially get better rates and loan terms. If you fail to repay your loan, the lender can take ownership of your equity.

How do secured debt consolidation loans work?

Secured loans are only available to borrowers who own equity in their house, property, vehicle, savings or investment accounts, jewelry or artwork, which can all be used as collateral against the cost of the loan. That said, one of the most common types of secured loans lender offer is a home equity secured loan.

If you want to use a secured loan to consolidate debt, you’ll need to apply for a loan amount that covers the size of your existing debts. Once you’ve been approved for the loan, you can then use the funds to pay off all your existing debts. You then make repayments on the new loan until it has been paid off in full.

If possible, you should try to find a secured loan that offers a lower interest rate than your existing loans or debts, as this will help you save money on your repayments.

Pros and cons of secured debt consolidation loans


  • Competitive rates. One of the key benefits of debt consolidation is that it gives you the chance to reduce how much you pay in interest if your new loan has a lower rate than your existing loans. Secured loans generally come with much lower rates than unsecured loans or credit cards – as low as 5.4% – making them more suitable as a way to consolidate debt.
  • More flexible loan terms. If you’re looking to get a debt consolidation loan, chances are you may be struggling with managing the repayments on your existing debts. With a secured loan you can generally get longer loan terms, often up to 30 years, which can lower your monthly payments and make it more manageable to pay off your debt. However, keep in mind that the longer the loan term, the more you will generally pay in interest on the loan. This means the overall cost of the loan will be higher.
  • Better chance of approval. A secured loan represents less risk to the lender than a regular unsecured loan, which means you have a higher chance of approval than you would for other debt consolidation options. It’s easier to get approved for secured loans compared to unsecured loans and credit cards if you already have multiple debts.


  • Often requires home equity. Home equity secured loans are only available to borrowers who own equity in their house or property, which is used as collateral against the cost of the loan. If you’re not a homeowner or don’t want to use your home equity as security, you may have a harder time qualifying for a secured loan.
  • Your equity is at risk. In the event that you don’t repay your secured debt consolidation loan, the lender may take ownership of the asset or home you used as security. In certain extreme cases, this may even mean you have to sell your house. If you’re already struggling with repaying debt, a secured loan may be a risky option.
  • Limited provider options. While most traditional lenders and banks offer unsecured personal loans, mortgages, and home equity secured loans, many don’t offer other types of secured loans. That means you may be restricted in the number of loans you can use for debt consolidation.

Can I get a secured loan for debt consolidation if I have bad credit?

Yes, you can get a secured debt consolidation loan even if you have bad credit, and a secured loan may be the most suitable form of debt consolidation for those who have a poor credit history. As a secured loan is backed by the equity you have in your home, lenders see it as less of a risk than other types of loan, so you have a better chance of approval.

What are my other debt consolidation options?

If you don’t own equity in your home, or don’t want to use it as security against a loan, you still have a couple of options when it comes to debt consolidation:

  • Unsecured loan. With a regular personal loan, you don’t need to provide an asset or equity as security in order to be approved. However, you may be limited in how much you can borrow, and lenders may be less willing to approve your loan if you’re already struggling with existing debts.
  • Credit card. Depending on the size of your current debts, you may be able to use a credit card to consolidate your debt. A balance transfer credit card lets you transfer existing debts onto a new credit card, and often come with an initial low-interest period. This means you can move your existing debt across to a credit card and then have typically anywhere from 3 to 9 months to repay the debt at a low interest. However, you’ll generally need good credit history to get a low interest balance transfer credit card, which means they may not be available to everyone looking to consolidate debt.

Frequently asked questions about secured debt consolidation loans

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