The process of merging all personal debts together into one single debt, generally at a
lower interest rate is called Debt Consolidation loan.
It has become a much admired
option since it makes it easy for a debtor to make just one payment rather than...
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The process of merging all personal debts together into one single debt, generally at a
lower interest rate is called Debt Consolidation loan.
It has become a much admired
option since it makes it easy for a debtor to make just one payment rather than
remembering to pay various payments like credit cards, education loan, home mortgages,
store credit etc.
A person having a fixed salary having to payback number of loans should
certainly go for a solo lower payment each month over a longer period of time.
Debt Consolidation loan are of two types - secured and unsecured loan.
In secured loan, a
valuable asset has to be placed as security against the advance.
Valuable asset can be a
real estate, plot of land, gold or even a car.
The loan is given at a lower rate of interest.
The amount of loan offered will be higher as compared to unsecured loan.
Further, the
repayment tenure is longer.
In second type of advance i.
e.
unsecured loan, there in no need to provide collateral.
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