Unsecured Debt Settlement Consolidation Loans

There are a number of different options available to you as a consumer with credit card debt who is seeking debt settlement consolidate or other ways to reduce your existing credit card debt. One of these option choices is an unsecured debt consolidation loan. An unsecured debt consolidation loan is a program offered by some banks and debt consolidation companies that is not secured by any equity or property, such as a traditional mortgage or auto loan is. These unsecured debt consolidation loans have a number of differences from other debt settlement options and other types of loans which are important to research to make sure that you are getting the best possible debt settlement vehicle.

What is an Unsecured Debt Settlement Consolidation Loan?

An unsecured debt settlement loan is, as mentioned above, not secured by home equity or other physical property. This means that:

There is a greater risk of default involved, and so the bank or company offering the loan will typically charge a higher than normal interest rate for the privilege of offering this type of loan.
This interest rate, while higher than a mortgage or auto loan, will usually be lower than the variable interest rates which your credit cards and other revolving debt may carry.

For this reason, an unsecured debt consolidation loan may help you save money in interest payments each month, as well as help you repay your debt faster.

One Payment

Unsecured debt settlement consolidation loans are also helpful if you have a variety of different monthly payments to different credit cards that are due at different times each month. By receiving an unsecured debt settlement consolidation loan, you will reduce the number of different payments you have to make each month, allowing you to better budget for unforeseen expenses by not having to worry when the next credit card bill is coming, or what date it is due on. In addition, you may save in late fees and other charges because you will be less likely to miss or be late on a single monthly payment than you would be on one of five or ten different small payments.

Qualifying

The process of applying for an unsecured debt settlement consolidation loan is also easier than a home equity or other secured loan. Because there is no property involved, there is no appraisal process, no escrow account to be set up, etc. Banks will look at your credit score, your income, and the amount you can pay per month, and make their decision based on these factors so you can get back on track quickly.

Getting Help

If you are interested in learning more about debt settlement consolidation loans or about other methods of reducing your credit card debt, consult with an experienced debt settlement attorney. Your attorney can help you evaluate your options, negotiate with your creditors and get your financial life back on track.

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