Unsecured debt consolidation loans are designed to combine a number of personal loans into one loan. To get an unsecured loan you will need a good credit rating, proof of income and a notice of assessment form.
If you have a poor credit rating you probably will not be able to get a unsecured loan. A poor credit rating usually means that a borrower will need a loan secured by some form of collateral such as a house or a condo.
Consolidation loans are used by many people to blend personal loans.
An unsecured loan is a loan that is solely based on the clients credit rating the lender has risked their money on a simple promise to repay a loan.
Lenders have very little recourse if a client decides not to repay the loan, this is why the interest rate is much higher. A secured loan is a debt that is back by an asset such as a car or house. The lender now has the promise of the client to pay but if the clients does not pay the asset can be sold to repay the lender. The promise to pay and an asset used as collateral allows the lender to offer a lower interest rate due to the lower level of risk.
Should you consider a unsecured debt consolidation loan?
– Do you having difficulty meeting some monthly expenses.
– You would like to trim your total monthly credit card payments.
– Your unsecured lenders aggravate you continually with telephone calls
and you want them to leave you alone.
– One basic bill would be easier to keep track of and manage.
Reasons why you should consider debt consolidation
- Lower the total amount of credit card payments.
- There will be just one easy bill to take care of.
- Eliminate none-stop collection agency phone calls.
- Reduce your stress and be able to relax since no agencies will be contacting you for past due bills.
- An upgraded personal credit rating may allow you to borrow eventually at reduced interest rates.
- Unsecured creditors have the option to chop the principal amount owing.
- They do this this can save you a lot of money.
Some types of unsecured loans that you can consolidate
School and educational expenses
Personal loans and credit card debt
Home improvement loans for kitchen, bathroom or landscaping
A copy of your credit score can be obtained from Transunion.ca or
Equifax.com. For a unsecured debt consolidation loan you must have a very good credit score, creditors in this case look at your past payment history to determine if you are a good risk. You should look at the information on the credit report to determine if the credit report is accurate.