How to Get a Bill Consolidation Loan with No Collateral

By Matt Smolsky , last updated January 6, 2012

Bill consolidation has meant financial freedom for many Americans. But while getting a loan without collateral can be difficult, it's not impossible. Here's how to get a bill consolidation loan with no collateral.

When you add up all your bills, whether its car loans, credit cards, personal loans and even mortgages, you can be facing a burden that's simply unmanageable. Interest rates are likely to vastly different from loan to loan, as are your terms for repayment. Writing three, five, even seven checks a month to multiple lenders makes you feel like you'll never get out of debt. To make matters worse, you may be upside down in your house, meaning you owe more than its worth, and thus can't get a home equity loan to consolidate your debts.

Money troubles lead to stress. If you're married, this can bring on tension with your spouse. Even if you're not married, feeling like you're buried under debt can impact your relationships with your kids, family, friends and coworkers.

No Collateral

This is why people turn to bill consolidation, even if they do not have collateral. If your credit is still good, it's fairly easy to get a bill consolidation loan with no collateral. Even with bad credit, you may be able to work something out with the bill consolidation company. The goal of bill consolidation should not be to get another loan, but to get out of debt for good.

Bill Consolidation Companies

There are a wide variety of bill consolidation companies you can work with. A simple Internet search will reveal many options. In addition to searching online, be sure to ask family and friends if they've used bill consolidation. Let them know you're interested in the service. You'll be surprised how many people will reveal that they've used bill consolidation once they know you're thinking of it.

Regardless of how you find the company, choose your bill consolidation company intelligently, and keep emotion out of the equation. Pick your top three or four candidates and compare their terms carefully. Don't feel pressured to make a same day decision. Many bill consolidation sales people are trained to get a new customer as quickly as possible. You don't have to sign anything until you're ready to. Make sure you understand repayment terms, including the amount you'll pay every month, your interest rate, and the exact date your bill consolidation loan will be paid off. The goal of bill consolidation is to get you out of debt as quickly as possible. Pay close attention to how much interest you’re paying over time.

A bill consolidation loan with no collateral is also referred to as an unsecured loan. This means you'll be paying higher interest rates than someone who can put up collateral or take out a home equity loan. Unsecured loans have higher interest rates, which means you'll be paying more to the lender to take out the loan. But, a good bill consolidation company will be able to negotiate with your current lenders and perhaps get any fees or late payment penalties waived. Plus, you bill consolidation company should be working to get you the lowest interest rate possible, collateral or not. The only time you might have to pay a very high interest rate is if you have bad credit.

Resources and References
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