Many consumers these days are struggling with debt. For some, it is medical debt from an illness or accident suffered by them or a loved one. For others, it is credit card debt. Many find that it has built up into a mountain of debt that seems impossible to pay down. High interest rates and late payment penalties on unmanageable debt may have compounded the problem, making it necessary to look for a solution. Some of those solutions could include:
- Credit consolidation
- A debt consolidation loan
- Credit card consolidation
- Personal loans
- Signature loans
For those consumers who might not be familiar with these terminologies, debt consolidation and credit card consolidation are basically interchangeable solutions. The basic concept is the taking of a majority of a consumer’s debt and consolidating all of it into one payment, which will be much lower than paying all of those separate payments. In addition, signature, personal, and unsecured personal loans are essentially identical processes, but with different names. All that they require is the consumer’s signature and promise to pay (PTP) with no collateral is required.
The most often chosen method to pay down debt is a debt consolidation loan, which could be secured by real property, such as a consumer’s home. In the event that the debtor defaults, however, their home could be in jeopardy. Unsecured loans, which are based purely on a debtor’s credit, PTP, and ability to pay, could be the best option for some. There is no collateral involved and many prefer it that way. People with good credit could find that unsecured personal loans are the perfect vehicle for consolidating and paying off the debt and ending up with only one payment to worry about.
Unfortunately, some consumers don’t choose wisely when they find themselves buried in debt. They can be lured by unscrupulous lenders into unsecured personal loans or other loan vehicles that put them in worse shape than when they started. Some will even opt for high interest payday loans or car title loans that are nothing but financial quicksand. Although they are a handy and definitely swift way to get much-needed funds in a hurry, they are only a short-term fix for any problem. Many people use them to help with a financial shortfall or emergency and then pay them off in full. The problem is that many people become trapped in a cycle of debt with these types of personal loans and can’t get out. The key with a short-term loan is not to get stuck making the minimum payment every month or, in some cases, every two weeks. If you must get one of these personal loans, get the loan quickly and then pay it off quickly.
So, if you’re looking for a way to get out from under unsecured debt, just be sure to do your research. Whether you choose credit card consolidation for your credit card debts or unsecured personal loans for medical or other unmanageable debt, try consulting an expert before making a move. You don’t want to trade one debt for a more expensive debt that could take much longer to crawl out from under. Weigh your options and remember that savvy consumers choose personal loans that benefit them, not just the lender.