Bad Debt Management

Can I Get a Bill Consolidation Loan
with No Collateral?

The answer is yes. You can get a bill consolidation loan without any collateral. The most commonly used method is called a credit card debt consolidation loan. This type of loan can help you relieve financial stress. However, you’d better be aware of the fine print… or it can really bite you.

A credit card consolidation loan is where you transfer all your debts on to a single credit card. There’s no question it is easier to keep track of one bill and one company each month rather than multiple bills.

Advantages of a Credit Card Consolidation Loan

The advantage of using a credit card loan is there is no collateral required. In addition, there is no mountain of paper work or processing to go through.

There are still some more advantages. Many credit card companies offer the first twelve months with no interest. At the end of the twelve-month period, your interest rate is much lower.

These add up to a lot of advantages for getting a loan with no collateral.

Disadvantages of a Credit Card Consolidation Loan

Sometimes things sound too good to be true. A wise man once said, “The real education is in the fine print.”

There are at least three disadvantages for using a credit card to consolidate your bills.

First, if you don’t make a payment on time, your twelve months of free interest is over. Nevertheless, it doesn’t stop there. You will begin paying interest and that interest rate will probably be much higher than promised at the end of the twelve months. If so, you could end up with more debt than you began with… that’s not good.

Second, if for any reason your credit card payment doesn’t process correctly, your payment will be marked as late and guess what… the same penalties discussed in the first option above apply.

Be sure you document all payments you make. Write down the day, the amount, the check number, etc. If you did make the payment on time, you can dispute the late payment problem.  Be aware that processing problems have occurred at a much higher frequency in the last year. I won’t pretend to answer the question why. However, be safe not sorry.

Finally, if you go over the credit limit, you can expect penalties and additional fees such as those discussed above.

Credit card bill consolidation is not for everyone. Although you have not collateral, the potential risk is great.

To be successful, you must make all your payments on time. Pay as much as you possibly can toward your debt during the first twelve months. This can make a big dent in your debt.

Finally, don’t make any additional charges with your credit card. Concentrate on reducing your debt, not creating more debt.

Consider carefully the pros and cons of a bill consolidation loan with no collateral. An informed decision is your best decision.

About the Author and Publisher
Larry Andrew founded and operated his own educational consulting corporation for over twenty years. He has extensive experience in teaching, business and finance.