So What Happens if You Cannot Pay Back a Secured Loan?
If you are only going to miss a few payments, do not worry - your home is safe. You will need to keep your payments up to date, and if you believe there is a strong chance you are going to miss a few payments in the future, contact your lending institution and make sure that there is no way that you can defer these payments or, at the very least, let them know they do not need to get debt collectors involved.
If you cannot pay it back and are not at all going to pay it back in the future, you are going to have a serious problem. Your lender is allowed to force you to sell your home in order to pay your debt and, if you choose not to do this, your lender can sell your home for you and use that money to pay back your debt.
First of all, if left with this option, you want to sell your house yourself as a lender selling your house will put it up at auction, meaning that it will sell for far less than it is worth. Second of all, look at other options first for paying back your loan before choosing to go this route. Secured loans are safer to make payments on because you put your house up as collateral in order to secure the loan, but that does mean that skipping out on payments is not an option.
• Why Can't I Repay This Loan?
• Is there Someone I Can Turn to For Help?
Even if both of those options are untrue, consult a debt help specialist and call your lending company to see if they can work out any other options. If you cannot pay back your secured loan at all, or you refuse to pay it back, you do risk losing your house. That is why not paying back a secured loan should not be an option for you. Instead, look for another way to make payments or fine extra income.