Is Non-Homeowner Debt Consolidation Possible?
By Sarah Dinkins
As stated above, there are different ways of consolidating debt and even
without the aid of a consolidation loan, a debt reduction of up to 60% is
easy achievable. There are professional negotiators that can agree with your
creditors new repayment programs along with reductions on the interest rate
you pay for your outstanding debt and sometimes even a cut on your debt’s
principal.
Debt Consolidation Agencies
Before contacting a debt consolidation agency you need to be aware of what
they are capable of doing and compare that with your financial needs. Using
the services of a debt consolidation agency is a decision to be taken as
last resort. Once the fact that you’ve got into a debt consolidation
program is reported, your credit history will reflect this and your ability
to get finance will be considerably diminished.
However, if your current bills, loan installments, unpaid credit card balances
and all other debt have become an unbearable burden, then a debt consolidation
program might be your only chance to avoid other more extreme measures like
bankruptcy.
A debt consolidation agent will be assigned to your case. He will gather
all the information available about your credit, your outstanding debt, your
income, your assets, etc. and with that information he will design a plan.
He will contact your creditors and negotiate with them. Since your creditors
want to get paid, they’ll agree more flexible conditions and they will
resign to charge high interests on your debt. They know now that if a consolidation
agent is taking care of your debt chances are that if they don’t cooperate,
they might get nothing.
There are mainly two different options after negotiation. You may obtain
new repayment schedules with lower rates and lower monthly payments you’ll
be able to afford or sometimes the agent agrees with the creditors a reduction
on the whole amount of debt in exchange of immediate cancellation of their
bills, balances and loans. If the agent takes this second path, he probably
has arranged for you to get approved for a consolidation loan. The money
obtained will be used to repay the new negotiated debt and you’ll end
up with a single monthly payment: The loan installments.
Consolidation Loans
With the aid of a debt consolidation agency, it is much easier to get a
consolidation loan in order to cancel your debt. The lender knows for sure
that the money will be used to repay and cancel all your debt. Probably,
the agency will arrange for the money to be directly transferred to the creditors.
The lender will then be your only creditor which lets him in a privileged
position when it comes to recovering his money if he has to take legal action
in order to do so. And that is the main reason why with the help of a consolidation
agent non-homeowners can get approved for debt consolidation loans too.
Sarah Dinkins is an Expert Loan Consultant in the financial industry who
helps people to repair their credit situation and get approved for home loans,
unsecured personal loans, student loans, consolidation loans, car loans and
other types of loans and financial products.
In her website http://www.badcreditfinancialexperts.com she writes
useful articles for people looking for professional advice in the finance
field.
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