If you have been struggling to keep up with even the minimum payments on your credit cards and / or loans, then you might need to consider a consolidation loan. If your credit score is still decent, you might even qualify for some unsecured consolidation loans. When you are approved, you will only have one monthly payment to worry about, and this will be a lot easier on you – especially if you have several credit cards you’re trying to keep up with.
Having an “unsecured” loan means that you won’t have to worry about losing something essential, such as your car, savings, or even your home. If you are truly concerned about your credit score declining, then it’s better to get an unsecured type loan before things get too bad, otherwise you would probably have no choice but to get a secured loan.
Who offers consolidation loans? There is a wide variety of organizations, including banks, specialized lenders, personalized lines of credit, peer to peer lending services, and so forth. The downside to unsecured consolidation loans is that they might come with higher interest rates.
The lower your credit score, the stricter the requirements. It’s going to be more difficult to obtain an unsecured loan if the score is below 650. This doesn’t mean that approval will be impossible, however. As mentioned above, there are different types of organizations that offer consolidation loans. What you need to do is take advantage of free consultations for an idea of what your options are.
Scams of Unsecured Consolidation Loans
Unfortunately, the consolidation industry is filled with scams. It’s not hard to run into a company that might try to force a high-interest rate loan that will cost a lot more in the long run than just paying your debts off individually. If your credit is already messed up to the point of no return, it might be better to consider an option such as bankruptcy.
If you are thinking of getting a consolidation loan, you’ll need to create a repayment plan and decide on a budget. To avoid missed payments and penalties, you really need to have a budget that will allow you to make at least the minimum payments on time.
Carefully shop around for the best quote on unsecured consolidation loans. Compare a few different lenders to ensure that you are getting the best possible terms and rate that you can qualify for. Don’t just apply for every loan you come across since each and every application will result in a soft inquiry on your credit reports, and soft inquiries do affect the score negatively.
Once again, it’s a good idea to take advantage of free consultations before applying for unsecured consolidation loans. One website that offers a free consultation, free estimate, and good customer service is CuraDebt. Since 2000, CuraDebt has provided tens of thousands of clients with debt relief solutions.