Will a Debt Consolidation Agency Include Secured Debts Into the Loan?
Loans and debt fall into two categories: secured debt and unsecured debt.
The latter type of debt refers to any loans that do not require collateral.
Mostly all credit cards and small personal loans fall into this category.
Secured debt refers to any type of lending that involves a collateral item.
A car loan would fall into this category as would a home equity loan.
Now, when it comes to the subject of debt consolidation services, some may wonder if it is possible to include secured debts into the deal.
The answer really depends on the type of secured debt and the consolidation service that you would be working with.
However, it is not without precedent that some companies have accepted secured debt into the consolidation process.
Probably the most common example of this would be a car debt consolidation loan on multiple vehicles.
That is, someone with more than one car can consolidate all the car loans through the service and only have to make one monthly payment.
This may sound like a good deal but it has its limitations.
Namely, it would be quite difficult to renegotiate lower interest rates or minimum payments.
Settling a portion of the debt would be difficult since the lender always has the option of repossessing the vehicles.
There are some consolidations services that may be willing to take the risk of paying off the secured loan and then holding the right to repossess the collateral in case of a default.
Obviously, this is a risk for all involved and it is not the type of loan deal you will hear about very often.
Ultimately, when it comes to a service consolidating secured loans this is possible but it may take a while to find such a venue.
The latter type of debt refers to any loans that do not require collateral.
Mostly all credit cards and small personal loans fall into this category.
Secured debt refers to any type of lending that involves a collateral item.
A car loan would fall into this category as would a home equity loan.
Now, when it comes to the subject of debt consolidation services, some may wonder if it is possible to include secured debts into the deal.
The answer really depends on the type of secured debt and the consolidation service that you would be working with.
However, it is not without precedent that some companies have accepted secured debt into the consolidation process.
Probably the most common example of this would be a car debt consolidation loan on multiple vehicles.
That is, someone with more than one car can consolidate all the car loans through the service and only have to make one monthly payment.
This may sound like a good deal but it has its limitations.
Namely, it would be quite difficult to renegotiate lower interest rates or minimum payments.
Settling a portion of the debt would be difficult since the lender always has the option of repossessing the vehicles.
There are some consolidations services that may be willing to take the risk of paying off the secured loan and then holding the right to repossess the collateral in case of a default.
Obviously, this is a risk for all involved and it is not the type of loan deal you will hear about very often.
Ultimately, when it comes to a service consolidating secured loans this is possible but it may take a while to find such a venue.
