Consolidation Loans for Non-Homeowners

Getting a loan to consolidate debts is easier for homeowners. Because of their home's equity, they can apply for a mortgage refinance or home equity loan and use the money to pay off their debts. Yet, it's also possible for non-homeowners to get a debt consolidation. A debt consolidation is beneficial because it typically involves lower interest rates and fixed terms, which allows a borrower to become debt-free in a relatively short period.

Instructions

1

Find a co-signer with good credit. If you don't own a home, but you want to get a debt consolidation loan, you can apply for an unsecured debt consolidation loan. These loans are difficult to obtain, and many lenders require an excellent credit history. Persons who don't have a strong credit background may be able to qualify with a co-signer. A co-signer becomes equally responsible for the loan, and in the event you're unable to repay, they are required to submit the loan payments.

2

Use collateral and apply for a secured loan. Secured debt consolidation loans are available to non-homeowners. However, you'll need to provide the lender with collateral tha's equivalent to the loan amount. Adequate collateral can include the title to a vehicle or other valuable piece of personal property.

3

Cash-in a life insurance policy. Universal or whole life insurance policies have a feature that lets policyholders cash-in their policy or use the money in their policy as collateral for a loan. If you need to get rid of your debts and you have a sizable life insurance policy, use a portion of the money to pay off your bills.

4

Contact a debt consolidation agency. Debt consolidation and credit counseling agencies have helped countless non-homeowners become debt-free. These agencies communicate with your creditors, negotiate lower interest rates and establish new payment plans. They'll consolidate all your debts into one account. In turn, you submit one payment each month.

5

Apply for a balance transfer. If you have good credit, apply for a low-interest credit card. Once you have the card, transfer the balances from the old cards to the new one. You'll enjoy a reduced interest rate, and you'll be able to consolidate and pay off your debts quicker.