Who Needs Unsecured Consolidation Loans?
loans are perfect for people who do not want to risk their assets
as with secured consolidation loans.
Like other consolidation options, unsecured consolidation
loans get you on the road of untangling your myriad of debts by
rounding up the payments of all your debts under one single loan.
The interest rates on these consolidation loans are definitely lower
than your previous debts, but they charge higher interest rates
than, say, secured consolidation loans.
Unsecured loans are not secured by collateral,
like real estate, cars, boats, or expensive jewelry. You do not
even have to be a homeowner or an owner of valuable property. Practically
the only things that you need to prove to your prospective lender
are that (a) you have a good credit rating, (b) you have the capacity
The minimal requirements are the plus side of
unsecured consolidation loans. The downside, however, is that interest
rates on unsecured consolidation loans are higher than secured types
of consolidation loans.
Majority of people, however, opt for unsecured
consolidation loans, because they get a crack at consolidating their
loans without having to risk their assets. If you already have a
good credit history to qualify, it goes without saying that the
best time to apply for unsecured consolidation loans, is when you
have not defaulted on your loans, or when your credit history is
still not tarnished.
Your capacity to pay consolidation loans is determined
by your employment history and current employment. Thus, your guarantee
to the lenders of consolidation loans is the proof that you are
able to pay your dues as they come.
There are many lenders of consolidation loans
on the market today. When you read up on their terms, you will most
likely find out that you cannot obtain consolidation loans if you
do not meet the minimum criteria of good credit history and proof
Different providers of consolidation loans have
different turn around times for approving applications. You can,
however, determine at the onset if you qualify for an unsecured
consolidation loan. Since you will only be required to prove that
are "credit worthy" by having a good credit history and
that you are employed, you will know where you stand if, indeed,
you apply. A missed payment that went into your credit report or
a bankruptcy filing are both flag signs of disapproval. But there
can also be other signs. Just check with your lender to be sure.
Since credit reports are not always accurate and
many times, if not most of the time, reflect bad scores, you would
do well to get an updated credit report every time after making
a full repayment of your loans. If you do this, you at least have
documented proof of credit worthiness when you apply for consolidation
If you have substantial debt, you are still credit
worthy for unsecured loans, and can apply for that kind of loan
with your prospective lenders. Just remember to keep your credit
report and proof of employment on hand to prove your eligibility
for such loans.