Is it possible for non homeowners to get a debt consolidation loan? Maybe, maybe not. The real issue isn't really whether you own your own home or not, it is whether you have any type of collateral for security purposes and if you have the means to pay the loan back. After all, there have to be reasons why you got yourself into debt in the first place. If the reason for your loss of income was because you were fired, you quit or you were layed off from a job, then chapter 7 or chapter 11 bankruptcy may possibly be a more appropriate choice for you than a debt consolidation loan, which you'll have to pay back.
Because this article was written about debt consolidation for non homeowners, we'll assume that you don't yet own your home. Do you own or are you buying any property at all, such as land, and, if so, do you have equity built up in it yet? This could make a big difference in your chances of getting a debt consolidation loan if part of your collateral were real estate with equity. If not, that's fine. Let's move on.
Could anyone possibly co-sign on on the debt consolidation loan for you? This person would have to be someone that has a good, established credit rating with personal assets that exceed the amount of your combined loan. Anyone such as your parents, brother/sister, trusted friend, business partner or aquaintance, ect. It really doesn't matter who it is as long as they have the ability to make the payments, in case you don't, and have the personal assets available to pay off the loan, in case you both fail to make the loan payments.
Do you have a life insurance policy? This would have to be a certain type of life insurance called "Whole Life". A Whole life insurance policy builds cash value over the years and you may borrow against the policy, if there is enough equity to borrow against and then only up to the current cash value. Cash value on A Whole Life policy takes time to accrue and comes from several years of consistant premium payments and compound interest. If you have had your policy for 10 years or more, there's a strong chance that you could have an asset that you could borrow against.
Other things to look at, depending on the amount of debt consolidation loan you'll need, are stocks, bonds, or other assets like cars, boats, motor homes, motorcycles, old coins, stamp collections or just about anything where value can be established and then used as collateral.
Getting approved for a debt consolidation loan for non homeowners might not be the easiest thing to do, but, with a bit of help and ingenuity, it isn't impossible to get.
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.
Both Guitarjoe & Gibran Selman are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Guitarjoe has sinced written about articles on various topics from Health Insurance, Affiliate Programs and Dental Practice. Is your debt becoming overwhelming? Are you uncertain what your options are? Are you trying desperately to avoid bankruptcy, but don't know which way to turn? Joe Stewart is a former Life And Health Insurance agent that also has experience with debt conso. Guitarjoe's top article generates over 18100 views. to your Favourites.