Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

For this post, we’ve teamed up with our partners at Fairstone

If you own your home, you have the option to secure your loan with home equity. Although people may be hesitant to use a secured loan or a home equity loan to pay down debt, there are several reasons why it may be your best option.

Our partners at Fairstone shared three main situations when they recommend a secured loan for consolidating debt:

1. You have high debt balances

Simplifying your payment schedule is a good first step when it comes to paying down debt. A debt consolidation loan can be used to pay off all of your outstanding bills, leaving you with a single loan and one manageable loan payment. If you have very high credit card or loan balances, you may need to tap into home equity through a secured loan to access more money and pay off those bills. 

At Fairstone, unsecured loans go up to $25,000, but homeowners can back their loan with home equity to access up to $35,000. 

2. You’re looking to reduce the amount of interest you pay

When you choose to secure your loan with home equity, your lender gains confidence that you will pay the loan back and make on-time payments. As a result, secured loans offer the best value for homeowners when it comes to interest rates. A lower interest rate can help you pay down debt faster and makes payments more budget-friendly. 

Additionally, if you have a history of missed payments, you may have limited access to different types of credit and loans. Lenders may also offer you a higher interest rate if your payment history indicates you’re a riskier borrower. If this is the case, a secured loan can help you access the lowest rate available to you. 

3. You’re looking for your lowest payment option

Debt repayment can put a dent in your budget. If you’re looking to reduce your payment amount and give your budget flexibility, a secured personal loan may be the answer. 

A secured loan lowers your loan payment in two ways:

  • A lower interest rate will lower the amount of money you pay back over the course of your loan 
  • A longer loan term can spread your loan payments over a longer period of time

With Fairstone, you could take up to 120 months (10 years) to pay back a secured loan. The longer your loan term, the more affordable your loan payments will be. Just be aware that the longer your loan term, the more interest you’ll pay over the course of your loan.

Interested in finding out how a secured loan can impact your loan payments?

Use Fairstone’s interactive loan payment calculator to find out how loan type affects loan payments. Enter the amount of money you want to borrow, choose your payment frequency and toggle back and forth between loan types for a payment estimate. 

Are you ready to take the next step towards paying down debt? Go to Fairstone.ca to get a loan quote and to find out how much money you could qualify for and what your payments might be. No obligation and no impact to your credit score. Connect with a Lending Specialist and let them know you’re interested in a secured loan so they can update your quote with the best payment and rate for you.

Fairstone avatar on Loans Canada
Fairstone

Fairstone Financial is a leading alternative lender in Canada, they have been helping Canadians since 1923. Their mission is to provide Canadians, with fair to good credit, with an affordable alternative to payday loans.

More From This Author

Special Offers

More From Our Experts

https://loanscanada.ca/wp-content/uploads/2023/09/GlobeMailTopCompanies2023-1.png
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood, BA
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.

https://loanscanada.ca/wp-content/uploads/2023/09/Finder-Awards.png
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia, BComm

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.

https://loanscanada.ca/wp-content/uploads/2016/12/caution-1.jpg
Beware of Fraudulent Lenders Impersonating Loans Canada

By Caitlin Wood, BA

A note to our clients about fraudulent lending practices and illegal upfront fees.

https://loanscanada.ca/wp-content/uploads/2022/10/How-To-Pay-Your-Taxes-With-A-Credit-Card-Through.png
How To Pay Your Income Taxes With A Credit Card

By Lisa Rennie

If you’d like to pay your taxes using a credit card, you’ll need to use a third-party service provider like Plastiq or PaySimply.

https://loanscanada.ca/wp-content/uploads/2021/08/Climate-Action-Incentive-CAI-1.png
What Is The Canada Carbon Rebate (CCR)?

By Bryan Daly

The Climate Action Incentive Payment (CAIP), or Carbon Tax Rebate, is quarterly benefit paid to eligible Canadians in

https://loanscanada.ca/wp-content/uploads/2021/03/Canada-Workers-Benefit-CWB.png
Can You Claim The Canada Workers Benefit (CWB) In 2024?

By Bryan Daly

The Canada Workers Benefit is a refundable tax credit for individuals earning a low taxable income of $3,000 - $24,112.

https://loanscanada.ca/wp-content/uploads/2020/12/Student-Tax-Credits-and-Deductions.png
Student Tax Credits In Canada

By Chrissy Kapralos

Similar to how there are specific tax credits and deductions for businesses, seniors, and parents, there are student tax credits in Canada.

https://loanscanada.ca/wp-content/uploads/2021/04/Pay-Less-Taxes-Canada.png
How To Pay Fewer Taxes In Canada

By Bryan Daly

People are always trying to figure out how to save money on taxes in Canada. We present the best ways to legally pay less tax in Canada.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Free
Service
Expert Tips
And Advice
Exclusive
Offers

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card