Qualifying for a Debt Consolidation Loan

Consumers have been assessing debt consolidation as a possible way to their problems from credit cards as well as other unsecured sources. The actual approach to consolidating debt needs to be, at least in theory, a fairly straightforward matter. You need to simply go to a lender and secure a loan at a decent interest rate that’s large enough to settle your high interest debt. However the process breaks down in actual practice, because lenders think that these are risky loans and are not thinking about making them any more. They are scrutinizing loan applications like never before, an understandable reaction to the reality that they have so much toxic debt on their books because of the bursting of the housing bubble and the recession. Unless you have lots of equity at your residence and are prepared to take a gamble by converting your unsecured debt into secured debt, the probability of qualifying for a debt consolidation loan at a good rate to resolve an unsecured debt problem are vanishingly low. The chance of losing your home then becomes the gamble in possibly getting behind in your payments, rather than your primary risk merely being having your credit be damaged.
You should consider getting access to the benefits of debt consolidation by dealing with a debt relief company rather than turning to a lender to get them. If this seems like an unexpected statement, then you must understand some of the facts that support it. Credit counseling and debt settlement services are available through debt relief companies, and both of these services incorporate desirable areas of debt consolidation. But instead of actually consolidating the individual debts as is done with a loan, consumers are nevertheless capable of taking advantage of making a consolidated payment at a lower rate of interest. In order to make this possible, the debt relief companies act as the middlemen along the way. They assume the responsibility of submitting the right amount to the creditors, having become the person receiving the consumer’s monthly consolidated payment. Of course there’s also big differences between credit counseling and debt settlement that have to be considered, so it shouldn’t be assumed that blindly choosing either of them will yield similar overall debt relief results.