Finance Tips

The average person juggles numerous bills each month–credit cards, auto loans, personal loans and more! If you’re getting buried beneath paperwork, you may want to consider a debt consolidation loan. Instead of dealing with multiple creditors, you’ll only have to pay one bill each month. And you can get a debt consolidation loan–even if your credit is not-so-perfect–if you secure it with some type of collateral. Here’s how to get approved:

1. Decide on your collateral

Whatever item you choose as collateral for your loan should be one you’re willing to risk, since the lender could take it if you can’t make your monthly payments. One of the least expensive options would be your home, since you could get a home equity loan, a home equity line of credit or a second mortgage. If you’re not willing to risk your house, you could also use an automobile or a boat. Some lenders will accept stocks or bonds, or even expensive belongings such as jewelry or electronics.

2. Find a lender

You’ll need to find a lender that accepts the type of collateral you’re using to secure your loan. Most major lenders and banks offer home equity loans, and many offer personal loans secured with a vehicle or boat. You may have to dig a little deeper to find a lender that will accept jewelry or other belongings as collateral. Check with your local banks and credit unions, and do a search online to find an appropriate lender.

3. Compare loan rates and terms

Before you sign up with any lender, make sure you compare their rates and terms with similar loans. Some unscrupulous predatory lenders may try to take advantage of your situation by charging you a high interest rate or extra fees. It’s always best to compare at least two loans to ensure that you’re getting the best possible rate.

Try using one of ABC Loan Guide’s Recommended Lenders For A Secured Debt Consolidation Loan.

Secured Debt Consolidation Loans are possible even for those with less-than-perfect credit. By using an expensive item you already own–house, car, boat, jewelry–as collateral, you become less risky as a borrower, making it more likely that you’ll get approved for a loan.

Sometimes when you are in debt, it feels as if there is no relief in sight. This is because there are so many myths about debt and debt relief. The fact is, there are many different debt relief solutions that you can explore. Take time to research your options and you may be pleasantly surprised. To help get you started, here is the truth about some of the most common debt relief myths.

Myth One: You Must Pay Your Debts in Full

Fortunately, this is not true. Many creditors will agree to debt reduction arrangements, especially if they feel that a debt settlement is in their best interests. For example, if you file bankruptcy, they have a good chance of receiving nothing. Don’t be afraid to contact your creditors and attempt to arrange a settlement that you can both agree on.

Myth Two: Bad Credit Stays With You Forever

Sometimes it seems that there is no escape from bad credit, but in actuality you can improve your credit score. Start by consolidating your debt. If necessary, get a personal loan. Every time you make a monthly payment on time, you increase your creditworthiness.

Myth Three: If You Have No Collateral, You Can’t Get a Personal Loan

Try using one of ABC Loan Guide’s
Recommended Debt Consolidation Companies Online.

Luckily, this is not true either. If you have no collateral, you can get an unsecured personal loan. Unsecured personal loans do not require you to pledge any collateral against the loan. Lenders will loan money to you in good faith, relying only on your promise to repay the loan according to the terms and conditions that they have established.

The average person carries about eight or nine credit cards! And if you have that many–or even more–you may be looking for a way to consolidate your debt into one, easy monthly payment. Fortunately, you have some options. You may want to consider:

A loan

If you’re a home owner, a Home Equity Loan, Home Equity Line of Credit or second mortgage is probably the least expensive way for you to borrow a lump sum of cash for debt consolidation. By tapping into the equity in your home, you can pay off your creditors so that you only have one creditor–your Home Equity lender–to worry about each month. If you’re not a home owner, you might still be able to secure a relatively low interest rate personal loan if you use an item of value that you own as collateral, such as your car, your boat, stocks or bonds, or jewelry.

Another credit card

Sure, the idea of getting yet another credit card might sound crazy and irresponsible. But the key is to sign up for a low interest card and then transfer ALL the balances from your old cards onto your new one. That way, you’ve consolidated all your credit cards onto a single one. And you don’t have to sign up for a new account if you already have a card that has a zero balance plus low interest. In that case, you can simply transfer your other credit card balances to the low interest card you already own. Either way, it’s a simple and relatively painless way to consolidate your debt.

Get professional help

Can’t qualify for a loan or a new credit card? It’s possible you need professional assistance. Debt consolidation companies–also called debt management companies–can help you lower your interest rates, lower your minimum payments and consolidate your debt into one monthly bill. You can find a debt consolidation company by searching online, asking friends and family, or checking your local yellow pages.

Try using one of ABC Loan Guide’s Recommended Debt Consolidation Companies.

No matter which choice you make, debt consolidation can help you get back in control of your financial life. By consolidating multiple credit card payments into one bill, you’ll find it easier to make your monthly payment on time. Moreover, many debt consolidation options allow you to lower your interest rate and minimum payments, which can help you save money and pay off your debt faster.