Bank finance articles and tips

Consolidating all of your debts by way of a personal loan can be a good idea when the total of your debts is not so high. It is easier because all your debts are combined into one and you only need to make one payment each month. Debt consolidation is hazardous so it is important to know what interest rates and fees you may be charged. If it is a secured loan, based on collateral, and you end up in default, your collateral assets could be seized.

The advantage in applying for personal loans that are unsecured is that you do not run that risk. Unsecured loans are not made on the basis of any asset. So if you do default, there is no way the loan office can seize any assets. The loan office is still liable to take you to court but getting his money back will be difficult. The loan office will most likely default to refinancing the remainder of the money owed.

Qualifications

Loan offices may vary in their qualifications for loan applicants but there is a certain agreement on fundamental requirements to be accepted for personal loans that are unsecured. The basic qualifications including a positive credit history, steady income that can be proved and a credit record with no major blots.

Excellent Credit History

Having a reliable credit history is the single most important factor in getting approved for a personal loan. Since your credit history is a cumulative total of all the requirements-stable employment, sufficient salary and unblotted credit record-it makes it easy for loan offices to go by your credit history in deciding to give you a personal loan.

If your situation is such that you have a poor credit history because of previous errors then you are probably in the process of re-establishing your credit which could take a long time. Nevertheless, it is still possible for you to obtain a personal loan if you can meet the other qualifications. This type of loan is called an unsecured poor credit loan.

Steady Employment and Provable Salary

Having both steady employment and proof of salary are two qualifications that interconnect. It is not enough, though, to prove that you have a steady salary. It is important to also have an income that can sufficiently cover the payments on your personal loan. Loan offices will not give loans that have payments in the category of 40% that exceed the net income received.

Spotless Credit Record

The best thing is if you have an unspotted credit record for the last couple of years. That means without any late or missed payments, etc. If you have filed for bankruptcy in the last two years, you will not qualify for a personal consolidation loan, unless you can supply a co-signer. If you can prove that you have been trying to improve your credit standing such as faithfully making payments over the last several months. Then despite the blots on your record, this will be taken into consideration.

If you do all these things, you will be able to qualify for a personal consolidation loan that is unsecured in no time.

Sarah Dinkins is a financial advisor who has been associated with Unsecured Personal Loans since long ago. She also holds a master degree in economics from Harvard University. To find home loans with bad credit and other financial products visit BadCreditFinancialExperts.com

By Sarah Dinkins
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