Debt consolidation process is not that easy to do. It starts with consultation with financial advisors and debt consolidators. You can only be granted by a secured debt consolidation debt loan if you have an asset that matches the value of the loan or even exceeds it. The type of asset that can be used is usually dependent on the lending company. This may in the form real estate, vehicles, stocks, bonds and other personal belonging.
The asset then becomes the collateral or security for the lending companies in case you fail to live up to the promise of payment. Secured consolidation is the alternative available if an unsecured loan is impossible. This is because the unsecured loan is only provided by lenders to people who have the acceptable credit rating. Those who have problems paying up their debts and have low credit ratings can try applying for the consolidation loans.
The most preferred collateral by banks and financial institutions is real estate property. If you have this asset type, it may be easier for you to have your application to be granted. Among the hardest assets for these firms to accept are jewelries and other personal properties.
There are several lending firms that offer reasonable interest rates for secured consolidation loans, so it should not be difficult finding the right consolidator to help you. It only becomes dangerous if you just entered into a consolidation program or agreement without understanding the terms and the consequences. To have a better picture of your consolidation options, do not forget to request for a debt consolidation quote from each prospective company.
Secured debt consolidation requires time and effort. The consolidation quote contains the proposed interest rate and monthly payment. This will ensure that you will not be on the losing end of the agreement. Once the secured loan is approved, the borrower is not allowed to sell the asset used as collateral without consulting the lending company.