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Using An Unsecured Debt Consolidation Loan For Financial Relief
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Using An Unsecured Debt Consolidation Loan For Financial Relief

The economic times are pretty tough right now and you may find yourself having a hard time making your payments. You might be considering a debt consolidation loan to make sure you don’t get dinged with late payments or bad debt.

Being deeply in debt can be a very bad time in your life. You can easily get bogged down in depression and feel like there’s no way out. Take heart, you aren’t alone and there are ways to work your way back to the top.

It is possible to do this using a secured loan, such as you would have on your house or car. Another way is to use an unsecured loan such as a credit card. Whichever way you choose, it is vitally important to completely understand exactly what you are agreeing to and what your rights and responsibilities are.

More and more people are looking at unsecured debt consolidation as a way to get some relief from the financial burden they are carrying. Restructuring your debt may be a good thing, but you will want to consider the differences between an unsecured and a secured consolidation loan.

Secured loans will generally have a lower overall interest rate over an unsecured loan. Unsecured loans may have a very low interest rate for a period of time and then jump to an unreasonably high rate of interest.

Read over any loan agreements carefully before you sign them. Making your monthly payments may be stressing you out right now, but a nasty surprise may be waiting down the road if you don’t know the terms and conditions of the new loan.

There may be conditions or terms that affect your interest rate or fees incurred. For example, you may have early pay-off penalties on the loan. The penalty for early pay-off could be more than you would pay in interest on the original agreement. In that case paying it off early would cost you money instead of saving you money.

If you have a financial advisor or attorney it could be a wise idea to have them look over any loan agreements before you sign them. This would help you avoid huge surprises down the road.

It doesn’t really matter if you choose a secured or unsecured loan to consolidate your monthly debt. The biggest thing is that you understand what you are getting into and that it is a choice both you and your budget can live with.


Street Talk

Thank you for your advice regarding taking out loans. Being careful about the interest rates and penalties in the loans are one way to compare loans. Of course, it doesn't make much sense to take out loans if you find out the loan costs more than you really can afford to pay. It's better to take out a loan that will help reduce debts and still allow people to set aside some money for emergencies.

Reply
  about 9 years ago

Number one on list of lessons. you must keep new debt in check. Good article Lacey, Pinned

Reply
  about 1 decade ago

Thank you so much Shawn!

Reply
  about 1 decade ago

thanks, Lacey

Reply
  about 1 decade ago

Thanks for stopping by Sharon!

Reply
  about 1 decade ago

Excellent points made. Being deeply in debt is the worst!

Reply
  about 1 decade ago

Oh it really is. Causes so much stress in your life.

Reply
  about 1 decade ago
melissa3  

Good writing and I really liked your ws, which I'm going to bookmark for future reference.

Reply
  about 1 decade ago

Thanks Melissa!

Reply
  about 1 decade ago
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