What will it cost?
Check what you may pay now and over time.
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Name the asset before comparing the payment
FCAC explains that a secured personal loan uses an asset as collateral and that the lender may take it if payments are not made. Ask precisely what is pledged and whether other people own or rely on it. The question is especially important when the asset is your home or the vehicle you need to earn income.
How are they different?
See what is the same and what is not.
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Compare the consequences, not only eligibility
Use the actual agreements to complete a side-by-side comparison. Do not assume that the word unsecured eliminates collection or legal consequences, or that every secured quote will have a favourable rate.
| Factor | Secured quote | Unsecured quote |
|---|---|---|
| Collateral | Identify the pledged asset | Confirm no asset is pledged |
| Full repayment cost | Include security-related costs | Include all borrowing fees |
| Missed payment | Ask about enforcement against the asset | Ask about collection and default terms |
| Early exit | Check repayment and discharge terms | Check early repayment terms |
Consolidation can change the kind of risk you carry
Read the key facts before you choose.
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Consolidation can change the kind of risk you carry
Using borrowing secured on your home to clear card balances does more than combine payments. It changes what stands behind the replacement debt. Write that change in plain language beside the apparent monthly saving. Ask a qualified professional to explain the consequences for your specific property and jurisdiction before signing.
Use a bad-month budget as well as a normal month
Read the key facts before you choose.
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Use a bad-month budget as well as a normal month
Imagine a temporary income reduction or a necessary repair. Could you keep the proposed payment going without using another loan? This is a planning exercise, not a lender stress test. If the budget fails, discuss a smaller borrowing need or repayment help rather than relying on the asset to make an unaffordable agreement feel safer.
What to have ready
- The asset, owner and security documents, if any.
- The total repayment and all setup costs.
- The default and enforcement terms.
- A realistic budget for a difficult month.
You do not need account numbers, your SIN, bank passwords, or files to start.
Does having collateral guarantee approval?
No. A provider still applies its own criteria and may assess the asset, income and other information. A DebtHelpers enquiry is not a valuation, approval or mortgage application.