Back to Insights
Changing debt security changes the downside of refinancing
Replacing unsecured obligations with secured credit may put an asset into a different contractual position.
A lower interest rate does not quantify that change in risk.
The security provisions need an independent reading alongside the schedule. Where a home or other important asset is involved, qualified advice can address consequences beyond a generic price comparison.
Build a consolidation comparison
Definitions
- Security
- Asset or interest supporting an obligation under the agreement, with consequences determined by its terms and applicable law.
- Guarantor
- Person who takes on obligations described in a guarantee; the extent of liability must be read in that agreement.