Pay Off Your Debt Without Risking Home

By: Gracy Bonsu
Piling of debt burden has all the potential to create adverse financial situations. If timely and adequate steps are not taken to eliminate debt burden, it may lead to extreme financial situations like bankruptcy. For this reason only, consolidation of debt burden is gaining importance and popularity with the rise in debts and related incidents among the Britons. According to a recent survey, near about 40% of the Britons suffer from bad credit problems and debt piling.


Debt consolidation means that all previous debt burdens of the borrower are merged under one loan plan. The lender of this new loan plan takes fresh loan at least of the amount of debts including interest rate and pays off the outstanding debts immediately. Thus after consolidation, instead of paying various monthly installments to different lenders, the borrower pays a single installment to just one lender. The debt consolidation always offers an option to take lower interest rate loan. In this way, it saves lot of money of the borrower as the high interest rate debts are paid off.

Earlier, debt consolidation loans were taken in a secured manner. With the increased competition in the loan market, the diversification in this product came in to existence. A borrower generally opts for unsecured debt consolidation loan when he does not own property to take loan against or despite owning the property he does not want to risk for a loan for fear of its repossession. So with the elimination of security clause from the loan scenario, lenders have to ask for credentials of the borrower for offering these loans. In case the borrower possesses good credit history then unsecured debt consolidation loan is easily available at comparatively lower interest rate. However, these loans charge a higher rate of interest compared to their secured counterparts.


The real problem arises in case of bad credit history. The lender always like to ensure safe return of the loan and are hesitant to offer unsecured debt consolidation loans to such borrowers. In such a case the borrower can go for the loans for poor credit history. Though these loans charge a comparatively higher interest rate, the availability is a must. Compared to the high rate plastic money, these loans offer a cost effective debt solution.


The prospective borrowers of unsecured debt consolidation loans should furnish proof of their income source and financial standing to the lender at the time of asking for the loan amount. Though borrower needs the cash necessary for paying off debts, still the loan mount will depend on to what extent the lender is satisfied with his past credentials. Normally the borrowers of these loans are the ones who have lesser debts or plastic money debt. The borrower can compare different lenders for lower interest rates before sealing the deal. The loan is offered for shorter repayment tenure(1-10 years). When smaller amount is borrowed, the loan can easily be paid back in time without any hassle. Online method of loan application is the cheapest way to avail these loans at borrower friendly norms.

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