|
Bill Consolidation Loan
How Do You Get a Bill
Consolidation Loan
with No Collateral?
There are several ways to get a
bill consolidation loan with
no collateral. However, let’s
discuss one of the most commonly
used bill consolidation loans.
The most popular no collateral
loan is referred to as a
credit card debt consolidation
loan. What people generally
do is transfer as many debts as
possible onto one credit card.
It’s much easier to keep track
of one company and one payment
than it is multiple companies.
There are several reasons this
option is used. First, there is
no long process approval and
mounds of paper work to go
through. This type loan does not
require that you put up
collateral.
In
addition, many major credit card
companies offer very favorable
terms for consolidating all your
bills onto their credit card.
They offer two compelling
reasons:
- They
offer you several months of
payments with no interest.
You should be able to get a
twelve-month no interest
option.
- They
normally offer you a much
lower interest rate at the
end of the twelve-month
grace period. This is
usually much lower than your
current interest rate.
This is very attractive for many
people that have no collateral
for a loan. However, there are
some very definite drawbacks. Be
sure to read the fine print of
the agreement. There are usually
three potential problems:
- If you
fail to make a payment on
time, the grace period may
immediately end. However,
that’s not all. You will
more than likely be given a
higher interest rate than
you would get at the end of
the twelve-month period.
Therefore, you could be
worse off than you were
before you started the
consolidation loan.
- If the
credit card payment does not
process correctly, your
payment will be considered
late. The same penalties
described above are
applicable.
Note: It is very important
that your write down and
document every payment you
make. Write down the day you
paid, the amount you paid
and the check number you
used. If any problems occur,
you can have the facts and
figures available to dispute
the late payment.
As a side note, consider
using an online payment
option. Online payments can
be used to automatically pay
your bill on a specific
date. They also track what
was paid and when.
- If you
go over your credit card
limit, there will be
problems. They range from
penalties and extra fees to
termination of your grace
period.
If
you decide to use a credit card
bill consolidation loan with no
collateral, be sure to make your
payments on time. Ideally, you
should pay as much as you can
each month. This can
significantly reduce your debt
over the twelve-month period
because all of your payment is
for your debt with no interest
charge. Also, don’t make any
additional charges on your
credit card. You want to reduce
your debt, not increase it.
Now that you know some pros and
cons for getting a bill
consolidation loan with no
collateral, do your homework. It
would probably be wise to talk
with a
debt management counselor to
get an outside objective
opinion.
About the Author and
Publisher
Larry Andrew founded and
operated his own educational
consulting corporation for over
twenty years. He has extensive
experience in teaching,
business and finance.
|
