Debt Solutions – Forbes Advisor UK


A money transfer credit card allows you to transfer funds directly from your credit card to your bank account. You can then use these funds to pay off your existing debt, as long as the credit limit is high enough.

If you choose a 0% money transfer credit card, you won’t have to pay interest for a fixed period of time. However, like balance transfer cards, there is usually a transfer fee to pay (often around 4% of the amount involved) and once the 0% deal is completed, interest will kick in.

Secured loan

A secured loan usually allows you to borrow a larger amount than a personal loan (often £ 25,000 or more) and you can often pay it back over a much longer period (up to 25 years). Interest rates can also be lower than for personal loans.

The big downside, however, is that secured loans are secured against your home – which means if you can’t keep up with your repayments, you risk losing it. So they should only be considered if you have considered all other options and are confident that you can make your repayments every month.

This type of secured loan is sometimes referred to as a second mortgage because it is actually a separate loan on top of your primary mortgage.

This can be a useful option if you don’t want to remortgage (see below) as it will incur prepayment charges on your existing mortgage.

Free up your home equity

Another option is to remortgage and release the equity in your property – it’s usually best to do this if your current mortgage contract comes to an end, otherwise you may have to pay a prepayment charge.

Provided that the value of your property – and therefore the amount of equity in your home – has increased, you can choose to take out a new, larger mortgage and use some of the equity to pay off your other debts.

However, keep in mind that your mortgage amount will increase, so your monthly payments are also likely to increase, even if you get a mortgage with a lower interest rate.

Plus, because you’ll be borrowing for a longer period of time than a personal loan or credit card, you’ll end up paying more interest.

Also be aware that if home prices go down, so will your home equity. This could potentially leave you in negative equity, where the size of your mortgage is greater than the value of your property.


Michael M. Tomlin