How Can I Get Consolidation Loans Without Using My House?

A consolidation loan involves taking out one loan to pay off multiple loans. Homeowners often take out a home-equity loan to pay off debt. However, using your home as collateral is risky, as you could lose your home if you become unable to make payments on the loan. If you have bills that would like to consolidate but don't want to risk your home ownership, you have multiple options.

Instructions

1

Take out an unsecured loan. You don't need collateral, and you can apply at your bank or at a local credit union. You will need to have good credit and a steady income source to qualify for an unsecured loan.

2

Borrow money from a friend or family member. Always put the terms down in writing if you choose to borrow from a friend or family member, as money-related misunderstandings can often damage relationships.

3

Consider peer-to-peer lending sites. Such sites are online communities for borrowers and lenders (see Resources). Applying is free. Enter the type of loan you need and the highest interest rate that you're willing to pay. Expect to receive bids on your application. Choose the lender offering the best terms. Although you typically need a FICO score of at least 640 to qualify, not all site have a minimum score requirement.

4

Transfer your balances to a low interest-rate credit card. This option requires that you pay your monthly minimum amount on time. One late payment will often cause the interest rate to increase.

5

Take out an auto cash out refinance loan. This type of loan works similarly to a home equity cash-out loan. Based on the vehicle's value, take out a loan for more than the balance on the current loan. Pay off the current auto loan, and use the remaining cash to pay off debt.

6

Borrow against your whole life insurance. There is no time limit to repay the borrowed amount. The amount is deducted from the beneficiaries' benefits when the loan is not paid back.