FAQ’s

Debt Consolidation Hub FAQ’s was created to help answer common questions regarding debt consolidation. It is important to understand the pros and cons regarding debt consolidation. Cases vary between individuals and understanding the type of program option will help determine your short and long-term goals.

What is debt consolidation?

Debt consolidation is taking all or most of your outstanding debt and combining that into one payment.  This can be done in a variety of ways including home equity loans, secured loans, and unsecured signature loans.  Secured debt consolidation loans, secured by assets the borrower may own are typically the easiest form of loan to qualify for.  Of course the lender will ask you to put up collateral for that loan in the form of property, vehicles, jewelry or anything of value that could cover the loan should you default.

If you are still in a situation where your credit is solid you may be able to qualify for an unsecured loan but the larger the dollar amount you borrow, the more likely it will be that the lender will still want some form of collateral.

Why Consider Debt Consolidation?

Consolidating your loans can help save your credit before it is too late.

With a bit of collateral these loans can be easy to qualify for. Lenders will typically accept real estate, retirement funds, stocks and bonds as collateral.

You will probably be able to avoid declaring bankruptcy

All payments are combined to one monthly statement

Less stress and peace of mind knowing your creditors will stop harassing you for money

Potential Problems When Consolidating:

If you default on the loan, your assets will go to the lender to pay your debt off.

You may be responsible for penalty fees to your creditors during the application process.

You will likely end up paying more in interest by the time you’re finished.

You may take a credit score penalty based on whether or not some of your principal was forgiven on certain loans.