Bad Credit Debt Consolidation Loans – Unsecured Vs. Secured Debt

Bad Credit Debt Consolidation Loans – Unsecured Vs. Secured Debt Consolidation Loans

Getting out of debt is easier said than done. Fortunately, there are many options available to people hoping to eliminate or reduce high consumer debts. Before filing for bankruptcy, which is more damaging than having excessive debt, consider other alternatives. For example, acquiring a secured or unsecured debt consolidation loan is one method to becoming debt free.

Ways to Eliminate Unnecessary Debts

There are many ways to reduce debts. Some people prefer to eliminate debt without obtaining a loan. In this case, getting second employment or seeking a higher paying job may provide you with the extra cash to pay down balances. There is no easy way to reduce debts. Furthermore, eliminating debts take time. Because of high finance fees, paying double the monthly minimum may not result in a significant reduction. However, debt consolidation loans have lower rates, which mean lower finance fees.

What are Unsecured Debt Consolidation Loans?

Unsecured debt consolidation loans are granted by banks and other financial institutions. These loans are not secured by property. Hence, they are also termed no-collateral loans. Getting approved for these types of debt consolidation loans are not easy. If you have too much debt, the majority of lenders are hesitant to extend you additional credit. On the other hand, if you have a very high credit score and earn a sizeable salary, obtaining an unsecured debt consolidation loan is feasible. Overall, individuals with a superb credit rating know how to use credit responsibly. Besides, these individuals will not risk injuring their credit rating.

The disadvantage of unsecured debt consolidation loans is the higher rates. Because, lenders are taking a gamble, be prepared to pay a high interest rate. Still, lender rates are low in comparison to typical credit card rates

What is a Secured Debt Consolidation Loan?

A secured debt consolidation involves collateral. To get approved for these types of loans, the lender will request a valuable piece of property. A vehicle title or boat title may serve as sufficient collateral. If you own a home, consider obtaining a home equity loan or line of credit for the purpose of consolidating debts. These loans do not require a high credit rating. However, applicants with good credit will receive prime rates. Avoid defaulting on secured loans. Failure to pay will result in the lender taking full possession of your property.

Strange & Unusual Loans

There are as many reasons to borrow money as there are things to spend it on. People borrow for all of these various reasons. The boom currently being experienced by the consumer credit industry is proof of this. While there are many standard reasons why people will seek a loan, there are also many very unusual ones.

If you think all loans go towards buying or improving a house, buying an automobile or taking a holiday, think again. This is by no means a comprehensive list of what people borrow for.

One recent study into the purposes of personal loans uncovered some surprising results. For example, over 57% of the people surveyed in this British pole believed that plastic surgery would make them happier. Cosmetic surgery can run into the thousands of pounds and as it grows in popularity, so too does it grow as a reason for borrowing money.

Or did you know that out of the 90% of Britons who would like to change at least one aspect of their appearance, 10% of them would be willing to go into debt to do it. With plastic surgery rates rising by an average of 50% a year, what once would have been considered a very strange use of borrowed money is becoming more and more popular. It comes as no surprise then that on the list of categories for the purposes of their loans that banks have on application forms, plastic surgery is joining the ranks of car and home loans as a standard reason to borrow.

Another area that is growing in popularity is the borrowing of money to buy expensive exotic pets. Imagine the reaction of the lending agent who read the application for a 15,000 loan to buy a camel. Or the customer who wanted a black stallion worth over 10,000. More and more people are abandoning cats and dogs and choosing reptiles, monkeys and even insects as their new best friends.

Other loan applications have shown a property developer interested in converting a cave into a fully modern home, and a medieval knight enthusiast who wished to buy a suit of armor for 5,000.

It is perhaps to be expected that while the types and methods of obtaining credit have rapidly diversified, so too have our various uses for it. Nowadays, not only can anyone get a loan, but they can get it for funding even the most hair-brained of schemes. Who knows what amusing results this will lead to?

Find Out More About Improving Your Credit Score-Debt Does Not

Find Out More About Improving Your Credit Score-Debt Does Not Have To Create So Many Problems For You

Trying to make improvements that will reflect on your credit score is a very wise decision, especially if you can do it early on enough for it to really make a big difference with your financial status. Throughout this article I want to discuss with you all some very important information regarding debt and how to get rid of it, so that hopefully you will be able to correct some of the mistakes that you have made over the years.

So many problems can be created because of ruining your debt and ofcourse your credit score, early on in your life. You do not want to have to deal with this kind of problem, really you don’t. If any little change can be made that might provide you with some financial comfort or relief, then please start working on those things immediately because if you do not then your financial future might potentially have such an enormous strain on it that there really is nothing that you could possibly do to make anything any better financially.

Your credit score actually provides all of your credit history to any creditors checking into it. Anything that you decided not to pay or just simply could not pay, it will all definitely show up, reflecting very poorly on you at some point in time for whatever reasons you might be trying to get some sort of loan or establish yourself as a reliable, responsible adult who pays their bills in a timely manner and can be trusted completed when agreeing to pay some type of debt in the future.

Any sort of financial mishap or serious debt issue, can totally destroy your chances of having the ability to purchase certain things throughout life, which can really put a big damper on many different things. Your debt condition can cause so much stress that you end up with serious health issues, this is something else that you should most definitely consider right now, instead of later on in life. Debt does not have to be so terrifying because if handled properly there are many things that you can do to make simple corrections, which will relieve you from a large strain that you have accidentally gotten yourself into.

Improving your credit score can be done by many different means and you will find it to be most beneficial, after only working on it for just a short amount of time. Do not expect it to happen overnight because it does not work that way, however, it will not take as long as some of you might have first expected. Be patient and persistent, as well as consistent, when it comes to improving the way that you spend your money and save your monthly excess of cash flow coming in and it will work out for you.

Debt does not have to destroy your life but if you choose to just let things go, over a period of time, it can and will happen to you, nobody is safe from the debt monster.

Credit Repair: Good Credit References

Unfortunately, there is no magic repair available today. You will need to dedicate a good deal of discipline, patience and effort to the task.

It will be a better idea to start with requesting copies of credit report from each of credit reference agencies. It is well known that Credit reference agencies do not make credit decisions. They only collect and give credit history and identifying information to potential lenders. If needed this information is also provided to potential credit employers.

The three credit reference agencies are Experian, Equifax and TransUnion. Most provinces provide at least one free credit report per year. You can often get your report by making a request through the automated telephone service, by regular mail and by email (in my view, a telephone request is the most easiest to get a credit report). When you get report, you must review it carefully for outdated information and errors. If you feel any problem with your credit report, you must report about it to credit companies in written. Include all supportive documentation you require to substantiate your claim.

If you are like a modern American you should have at least one negative credit reference on your report. These negative credit reference include such credit remarks as:

Defaults (The lender has doubts that you will repay his owed funds.)
Late Payments (It is better to pay early.)
Liens or Judgments (Legal process by a lender to recover payment.)
Repossessions.
Bankruptcies.
Excessive Credit Inquires.

As lenders don’t know you personally, they just believe on a system that allows them to make a better credit decisions. If you have been denied credit, it is not a personal matter it is just a business decision. After all, would you lend money to someone who has a history of paying it back late or absolutely not paying it back? Your answer will be no, you will not like to give money to person having negative credit references. Make a plan to develop some good credit references. As you will pay off your credits, your credit report will improve that will change lenders attitude for you.

Let’s start with the basics:

Pay your bills early.
Stabilize.
Maintain accounts.
Keep your head out of the sand.
Consider online banking.

Each of these steps will help you to build good credit references with time.