Secured Debt Consolidation

How to Get Approved for a Secured Debt Consolidation Loan

Do you feel you are being buried by credit cards, auto loans, personal loans, and more each month?  You are not alone.  The average American has $30,000 in debt or more that they try to manage each month by living paycheck to paycheck.  Instead of working with multiple creditors you can obtain a secured debt consolidation loan.  This type of loan allows you to consolidate your debt into one payment, with one interest rate, and pay down your debt quicker.  A secured debt consolidation loan uses collateral to lower the risk you pose to the lender or bank.  Lenders prefer to see there is an option for them in the event of a defaulted loan, such as repossession of the property or home you used as collateral.

There are three steps you can use to obtain approval for a secured debt consolidation loan:

1. You need to examine what you have as collateral and if the collateral is worth the amount you need in a loan.  There are certain items that can work as collateral for loans.  A home and property are the two most common. Some lenders will allow you to use an automobile, boat, stocks, bonds, or expensive jewelry and electronics.  A bank requires the home or property.

2. Finding a lender is equally as important as examining your collateral.  You need a lender who will accept the collateral you have, offer you a fair interest rate, and approve you for the secured debt consolidation.

3. When looking for a lender compare the loan rates and terms you are finding.  Each company will have specific regulations they follow for awarding loans.  They also have certain rates they will offer based on their concerns about risk.  You may discover one lender has a higher interest rate than another.

Secured debt consolidation does not require that you have perfect credit.  Secured debt consolidation is meant for individuals who are struggling with their debts.  Companies may provide a higher interest rate to a person with bad credit, but the savings in one monthly payment and one interest rate are worth it.