Today many people are seeking unsecured loans for many reasons. People are asking if Citibank has an offer for unsecured debt consolidation loans. The truth is most major lenders offer unsecured loans or what are referred to as signature loans. But are these loans really what are best for you?
The big difference between an unsecured loan and a secured loan is collateral and in the biggest majority of cases the collateral is going to be your home. The bottom line is using your home to secure a debt consolidation loans is not a good idea.
Statistics show that many people who take out a loan to pay off credit card debt often find themselves with more credit card debt again within a year. If something happens and you cannot make your payments, the lender has the right to foreclose on your home. There are other options for getting out of debt that will not put your home in jeopardy.
Unsecured loans are not secured with collateral. They are given to you just by signing for them. However, you are going to pay more in interest for a loan that is not secured. The lender is taking a bigger risk with an unsecured loan. If you do not make your payments, their only recourse is to sue you and they are not necessarily guaranteed the money, as in foreclosure.
If you are consolidating debt, it is not recommended that you get another loan. In most cases excess debt is incurred do to unfortunate circumstances or poor decision making. Paying off loans with other loans does not usually get you ahead.
Today, your best options are debt counseling or debt settlement. Which one of these options you choose depends on how much debt you have, how past due your debt is and if you can comfortably make a minimum payment. If you are not more than a month or two past due and can make a minimum payment, credit counseling is kinder to your credit.
However, if you are more than 2 months past due or cannot make a minimum payment, debt settlement is going to work better for you. This option lowers the amount of your credit card balance. The big disadvantage is what debt settlement will do to your credit. The object here is to get out of debt as quickly as possible and rebuild your credit when you are done.
Citibank does offer unsecured debt consolidation loans, but before you take out a loan to consolidate debt you should consider all of your debt relief options. Find out how you can be debt free in less than 3 years and on your way to financial freedom.
