Unsecured debt help loans sometimes appear to be rather elusive. While everyone appears to be offering these products, when you actually need one more often than not your application is declined. There is a clear reason for this. Like many financial products the only people who can qualify for these are those who do not really need them.
If your situation can be described by one of the following then it is very unlikely that you will be able to qualify for an unsecured consolidation loan.
Bad Credit History
If you currently have unpaid defaults that you wish to pay out with a personal consolidation loan you will find it difficult to qualify for an unsecured personal loan. These loans require the borrower to have a clean credit history. Even if you have no unpaid defaults but simply looking to consolidate several over the limit credit cards, the results will be the same. The new lender will want to see your loan statements for the credit facilities that you wish to consolidate. If these show poor payment history they are very unlikely to approve a consolidation loan.
Lack of Sufficient Provable Income
If you have lost your job, have changed jobs, have lost a business or have gone through any other event which has resulted in a decrease in your disposable income, you will find it difficult to qualify for a consolidation loan.
Every unsecured loan applicant needs to demonstrate to their lender that they can comfortably afford their new loan given current income and obligations. Lenders will not be able to take into account your cash income.
Unsecured personal loans require a good income and are not available to people experiencing financial hardship or those who mostly work for cash and have no proof of income.
Large Debts
If you have $90,000 of unsecured debts that you wish to consolidate, there is simply no such product available in the market. Most unsecured personal loans cut out at around $40,000. We talk to people with very large debts and a good credit history who wish to put together unsecured loans for $150,000 and up. This is simply not possible without some form of security.
Mostly Secured Debts
Of course if you are falling behind in your car loan, your home loan or a hire purchase agreement secured by business equipment, you are unable to resort to an unsecured consolidation loan in order to repay these lenders. In most cases unsecured loans are more expensive than secured finance and the amount you are likely to need will be way in excess of the possible personal loan limits.
What can a Borrower with Large Debts and No Assets do?
Your options are limited if you have very large debts and no assets to secure a new consolidation loan. You may try to appeal to your credit providers for some reprieve claiming financial hardship if in fact your finance problems are likely to be temporary. They may be able to assist with a short term reduction in mandatory payments.
Failing this you may wish to have a look at options available under the bankruptcy act such as a formal debt agreement with your creditors. A Part 9 or a Part 10 debt agreement may help you to permanently reduce your set payments until you come out of the debt agreement completely debt free. These arrangements do have an impact on your credit history, however borrowers who are already behind with their debts may find this to be a very effective debt solution.
