Borrowers that are unemployed can sometimes qualify for debt consolidation loans. A debt consolidation loan is a type of loan that combines all your loans into a single loan. It helps to simplify the payment of your loan and you will only make one single monthly payment when you are on a debt consolidation loan. Various types of loans can be combined into a single loan including personal loans and credit card.
Getting a debt consolidation loan with a lower interest fee can reduce the cost of paying your existing debt. This can be helpful especially when you have lesser income and now need to rely mostly on your savings to pay your debt. With debt consolidation loan, you can expect to pay 30%-50% less than the original amount you owe.
There is a higher chance of getting approved for the debt consolidation loan if you have other sources of income coming in even though it may not be as much as the salary your previous job provides. If you have a spouse who is employed, you can put down income on the loan application. If you completely don’t have income, it can be difficult to get approved for a loan.
Before you take out a debt consolidation loan, they will require you to go through a debt counseling session. The debt counselor that sit down and review your income and expenses. The debt counselor will review your income and expenses and then create a budget plan. The counselor can provide suggestions on how to reduce your bill costs so that your savings will last for a longer period. The counselor will then search for an affordable debt consolidation loan with a low monthly payment that you can afford to pay.
When talking to the debt counselor, make sure you are upfront with him with all the information he requests from you. The debt counselor may ask you questions like how many payments your savings can sustain until you find a job. He may also evaluate the total income you will need to cover all your payments at the time. He can then suggest that you do a freelance job or part time job to temporarily derive the income for paying your bills until you find a full time job again.
Prior to getting a debt consolidation loan, you should ask yourself how long before you will find a new job. You can always repay the debt consolidation loan early if you manage to find a job after you get approved for the debt consolidation loan. Many people still keep the unemployment budget after they get employed so that they can use the extra money to pay off their debt consolidation loan early.