Unsecured Debt Consolidation – Dont Be Afraid
Those without equity will have to find an unsecured debt consolidation loan. An unsecured debt consolidation loan has a certain advantage over a secured loan. With an unsecured debt consolidation loan none of your high value assets are used to secure the loan. An unsecured loan is a type of loan that is granted on the merits of a persons good credit and past payment history.All that is needed for this loan is a signature and to agree to the payment terms. Even though an unsecured debt consolidation loan does not put your assets at risk, the loan can carry a higher interest rate because the lender has agreed to provide funds to you without assets to protect the loan.
Essentially the lender is taking a risk with you and your past good credit history,as a result you may find that you have to pay a higher rate for this privilege. Careful planning is essential to a successful debt consolidation loan.You need to figure out which debt that you anticipate paying off whether obtaining a secured or unsecured debt consolidation loan. One way to meet your goal of debt payoff is to create a list of all of your creditors, as well as total amount of debt, the monthly payment that is due and the annual percentage rate of the balance that you owe. Next you should organize the loans according to annual percentage rate.
Use the list that you created when shopping around for your loan and seek a consolidation agreement that allows you to pay off your higher rate of debt with your new lower rate funds. One final bit of important advice: Once your debts are paid either with a secured or unsecured debt consolidation loan, you should consider closing any open lines of credit and cutting up those high rate credit cards that are no longer necessary or at least making them inaccessible to yourself. Now that you have been able to consolidate your more costly loans into a more manageable chunk use discipline to keep yourself in good standing so that you do not find yourself back where you started.
Do not fool yourself or tempt yourself with those new low balance lines of credit.