The average person juggles countless bills every month – credit cards, car loans, personal loans and more! If you’re feeling overwhelmed by paperwork, you may want to consider a debt consolidation loan. Instead of dealing with multiple creditors, you only have to pay one bill per month. And you can get a debt consolidation loan — even if your credit isn’t so perfect — if you secure it with some sort of collateral. To be approved, do the following:
1. Determine your collateral
Whatever item you choose as collateral for your loan, it should be one that you are willing to risk, as the lender can take it if you can’t make your monthly payments. One of the least expensive options would be your home, as you could get an equity loan, a home equity line of credit, or a second mortgage. If you are not willing to put your house on the line, you can also use a car or a boat. Some lenders will accept stocks or bonds, or even expensive assets such as jewelry or electronics.
2. Find a lender
You need to find a lender that will accept the type of collateral you use to secure your loan. Most major lenders and banks offer mortgages, and many offer personal loans secured by a vehicle or boat. You may have to dig a little deeper to find a lender that will accept jewelry or other possessions as collateral. Contact your local banks and credit unions and search online to find a suitable lender.
3. Compare loan rates and conditions
Before you sign up with a lender, 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 additional fees. It is always best to compare at least two loans to make sure you get the best interest rate possible.
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. Using an expensive item you already own — house, car, boat, jewelry — as collateral reduces your risk as a borrower, increasing your chances of getting approved for a loan.
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