Desperate times call for desperate measures, and in today’s economy, nothing seems to be to far-fetched from finding solutions to help individuals or small businesses get out of debt. One of options that people are looking for are debt loans to help pay off their debt.
Nationwide Debt Reduction is not a big advocate of borrowing or consolidating debt into loans for several reasons, however we will tell you what options are out there for your perusal.
The biggest mistake we saw people in the late 90’s do is take out Home Equity Loans or HELOC loans as they are called to pay off credit card debt. What most people did not realize it that they were taking “unsecured debt” (credit card debt) and turning it into “secured debt” by taking out one of these loans. It is only now that we are starting to see the ramifications and fallout of that practice.
If you are plagued with credit card debt, it is best to contact a debt settlement company, like ours, who have trained professionals who can help you understand how programs like these work, in order to help you get out of what we refer to as the “debt trap.”
That said, other avenues that are available to you to secure a loan include:
- Debt Consolidation Loans – These loans are only for people who can qualify for this type of loan. The concept is to consolidate all of your debt into one loan, in which you make one payment/month versus several. In addition, the concept is to obtain a lower interest rate on your debt consolidation loan than you are otherwise paying on your other debt.
- Secured Debt Consolidation Loans – These are loans for individuals who typically have bad credit and find it hard to obtain debt consolidation loans. By applying for a secured loan rather than unsecured loan, you are offering the lender more protection.
- Home Equity Loans (HEL) – A HEL allows homeowners to take out the equity that they have built up in their homes and to use the money for any purpose, which can include paying off other debts. Again, NDR does not advocate these types of loans, as you would be turning “unsecured debt” into “secured debt” with one of these types of loans. HEL’s on the other hand, usually do offer much lower interest rates than those found with credit cards.
- Unsecured Debt Consolidation Loans – Unsecured debt consolidation loans are very difficult to obtain than, especially for those businesses or individuals who already have bad credit. Unsecured loans may be granted to those with bad credit if you have a working relationship with your lender or you are willing to pay a much higher interest rate for the loan. In addition, these types of loans are usually very small in nature, as the lender is unwilling to extend credit to those who present themselves as risks.