Debt consolidation loans without owning a home (better known as unsecured loans) aren't as widely available as secured lending products. This is because the lender doesn't have any collateral should the borrower default on the credit agreement.
According to Automated Access to Court Electronic Records (AACER), the number of individuals expected to declare bankruptcy over the course of 2009 may reach 1.5 million. This doesn't include the thousands of other consumers who enter debt settlement programs and Debt Management Plans.
Debt Consolidation Loans Without Owning a Home
Unsecured loans for debt consolidation are more widely available for those with a good credit history. However, missed and late payments need not preclude someone from getting a loan. Whilst pawnbroker loans are not really suitable for consolidating debt, a peer-to-peer lender may be able to help.
Prosper Loans
Prosper.com is a peer-to-peer lender where people can borrow money regardless of credit status. The loan is not from a financial institution; it involves people lending to people. The process is simplified as Prosper acts is an intermediary- they take care of all the administration, credit checks etc.
The borrower will document on the website their reasons for wishing to borrow money. They will also explain other matters, such as why an adverse credit history or a high income-to-debt ratio exists. The application process is helped by specialist groups that provide helpful guidance and assistance.
Debt consolidation loans without owning a home don't all originate from just one lender. The risk is diversified as multiple lenders contribute a small amount of money each through a bidding process until the full Prosper loan is satisfied. A loan for $4,000 could be made up of 20 lenders offering $200 each.
Unsecured loans for debt consolidation are available for up to $25,000. The rate of interest the loan will attract will depend upon which credit category the borrower falls under. Those with an A or A* rating will receive the most favorable interest rate.
Debt consolidation loans without owning property are more difficult to find in contemporary America, but they are still available from Prosper loans. Those with an adverse credit history should think carefully before borrowing money because the rate of interest could make repayments difficult to manage. Consider a debt relief program, such as a debt settlement program, before taking out another loan.
Sources
aacer.com
Disclaimer: This article in no way attempts to give legal or tax advice. One should consult a licensed attorney, tax advisor, or other qualified professional before proceeding.
Asa Ghaffar - Asa has over 10 years of practical experience in loan approval, secured lending, bad credit repair, stock trading and debt management.
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