Whenever any borrower wants to take any loan or mortgage, he has to face certain disadvantages and same is the case with lender that when he gives loan to somebody then he surely gets some difficulties.
There are two types of mortgages that you will find in the market i.e.
- secured mortgage
- unsecured mortgage
When you want to take secured mortgage then in this case, you have to pledge your property as a guarantee whether it’s a house or any other personal property of yours. This gives benefit to the lender in this way that if borrower is not able to give the payment back then it’s right of the lender to take the possession of the pledge property of the borrower.
In this type of mortgage, you don’t submit any property as a collateral.
There is another type of mortgage which is known as private mortgage. Here the mortgage is financed by some friend, colleague or any financer other than bank.
Debt Consolidation Financing sometimes helps the borrower to cope up with this type of situation. But majority of the sellers don’t take the pledge property in this situation. If the borrower is not able to give the payments then lender send him the demanding letters before adopting any extreme step. No doubt, there are many aggressive lenders who have been dealing the different borrowers who are not able to give payments back but they don’t take their properties in possession because they don’t want to destroy the house of anybody, Debt Consolidation Financing agencies are one of that lenders who give some relaxation to the borrowers.
Even if you talk about the unsecured loans lenders try to give them notices but don’t go for the possession of property. They consider it the last resort if borrowers are continuously missing their payments. Although it’s not a difficult step for the lenders to take any legal step, because it’s very cheap procedure to give borrower, a notice of possessing his property.
There are many other things in unsecured loans that are useful or not useful in taking the loan. In the unsecured loans, you have to bear higher interest rates than other loans and it is also a high risk loan instrument, if you are demanding for the high loan. Debt Consolidation Financing when deals in unsecured loans they helps the borrower to remove their overburdens which is very important for them to eliminate whether it’s a debt of home or you have taken for your business activities.
When you don’t have any property or asset then unsecured loan can help you better but on the other hand you also have to face the higher rates. So, decision is yours that which type of loan you want to take. But before moving towards any Debt Consolidation Financing, you should keep in mind certain things which can affect your life style. Do the proper research on various types of loans and ready for the consequences if you have taken high amount of loan. You should have knowledge of secured and unsecured loan because research will make you easy to decide which loan instrument are best suits your needs and can fulfill your needs.