Debt consolidation loans from various financial institutions in Lebanon are one option to consolidate debts. If the loan has better terms than the consumer debt getting consolidated then the result will be lower interest rates and lower debt payments. The problem usually is finding a debt consolidation loan that has more favorable rates. Doing so all most always requires the debtor to secure the loan with collateral. More often than not this collateral is a residence and the loan is a home mortgage.
An Unsecured Loan
If there is no collateral available or the debtor does not want to provide any then the only option is to get an unsecured loan. Unsecured loans with better interest rates and payment terms than standard “off the shelf” consumer debt can be very hard to find in Lebanon, especially in today’s credit markets. If credit is not perfect then most likely only a subprime personal loan to consolidate debt will be available. This has a very low chance of improving the debtor’s financial situation and will most likely damage it.
Lebanon – Personal Loan to Consolidate Debt
Consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be made carefully. Apart from relieving the borrower of the headache of haggling with numerous creditors, debt or bill consolidation also considerably reduces the monthly repayment bill.
There are two types of loans you can take out to cover all your debts. Depending on your situation, both can have a different set of advantages and consequences.
Secured debt are called that as it involve a collateral. This means you take out a loan against the equity you have in the house you are staying in, your car, your land and so on. In the event that you fail to repay the loan borrowed, this collateral can be confiscated by your lender to be auction off in order to cover the loan.
As you can see, there is a huge consequences in losing your home or other valuable asset if you mismanage a secured loan. But the good news is, since your lender have some sort of security in hand, you are considered credit worthy and will likely score a lower interest loan.
It is possible that you are in so much debt that you are not eligible for another loan. In this situation, having some kind of collateral helps as you can have the option of taking out a secured loan.
No collaterals are involved in a unsecured loan. An unsecured loan may be harder to obtain since you are already having bad credit record at this point. When you do get one, the interest is very likely to be higher than that of a secured loan. The allowed loan amount also will not be as high, but the risk involved is also lower.
You don't have to listen to what debt consolidation company tell you about your ability to get a loan and how you have to pay high interest to get one. Just obtain your own copy of your credit rating to know what you are eligible for. No matter which type of loan you choose, always make sure you can make full payment on time so your debt consolidation can work its way to make you debt free in the shortest time possible.
Debt Consolidation Can Either Help or Hurt You
Do you have a ton of student loans which you borrowed to continue your higher education? You may be finding it difficult to make monthly payments rather than concentrating on your studies. Here are some ways to organize all your student loans into one payment and arrange for the payments on a monthly basis without any hassles. Normally student loans attract a low interest rate, but with your limited source of income during this financial crisis, you may not be able to meet that small amount. Free consolidation services are provided by many institutions.
First, list out your different loans and their monthly schedule of repayments. The U.S Department of Education and other institutions can bring all your loans into a single direct consolidation Loan. You might be able to get a subsidy against your loans which you can retain very well and the balance in all the loans can be joined together to make a consolidated one.
Next, become acquainted with online calculators to calculate the consolidated amount and to find out a repayment schedule that you will be able to afford. Now you have the option of applying for a loan consolidation which you can do online, over the phone, or via a paper application. Complete the application however you prefer and send it along with a promissory note. Ensure that you provide all necessary details without any need to correct them later. Simultaneously make a registration to obtain Federal Student Aid PIN. This PIN belongs to you and it is your electronic signature and provides access to your personal records. So keep it safe without allowing anyone to access your PIN. Your Loan consolidation application status can be viewed by using this PIN.
You must have some knowledge on the applicable law related to a loan consolidation. For this purpose, acquire sufficient knowledge so that you can know more about your responsibilities as a student loan consolidator. If you have made the student loan consolidation and still find that you have more loans to consolidate, you need to make a separate application within a period of 180 days from the date of loan consolidation.
Apart from this, you have an added advantage if your repayments are in time. You get a reduction in interest rate on these student consolidation loans. There are many online service agencies which offer to consolidate loans as a free service.