A consolidation loan is financing for people that have multiple debts, while lending products available to consumers fall under two main categories: secured and unsecured debt. So is a consolidation loan secured or unsecured?
Because debt consolidation entails taking out one loan to pay off many others, this is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan. It often involves a secured loan against an asset that serves as collateral, which is most, commonly a house. The risk to the lender is reduced so the interest rate offered is lower. It has several advantages, like consolidating your other debts, and thus to bring down the interest rates as applicable.
However a debt consolidation loan is not always secured as most of it is not linked to your assets therefore you cannot lose anything should you miss a payment.
We will be able to offer advice on the suitability of debt consolidation to your specific financial situation, as there are instances where it would prove unsuitable. Our consultants will be able to help you with regards to secured and unsecured debt consolidation, and advice as to which would be most favorable to your outstanding debts. Operating on a national basis, we can also provide you with debt counseling or a debt review in South Africa. As mentioned, debt consolidation could save you on monthly payments and interest rates, which has made it a viable option for many. To find out if debt consolidation in South Africa is an option for you, contact Quick Consolidation Loans today.