We are going to cover some types of secured debt consolidation and explain in more depth why it’s usually a bad idea.Let’s take a closer look at what types of collateral can be used in secured consolidation loans.You have the option to select the servicer of your choice (of which, Nelnet is an option) After your new Direct Consolidation Loan is complete, you may still add more eligible loans to your existing consolidation.If you would like to add other eligible loans, your servicer must receive your Request to Add Loans Form within 180 days from the date your Direct Consolidation Loan is completed (originated).The lender has extended you the credit to buy one car for a certain amount of money.Imagine the trouble that could ensue if you buy a car for ,000 and, without the approval of the lender, find a way to use the rest of the loan funds to pay off the other car.
I’ve been approved by a lender for up to ,500 on a new car.
Debt consolidation is a form of debt relief that combines multiple debts into one account.
Or, in other words, it uses one loan to pay off multiple loans.
Secured debt consolidation involves using an asset, such as a home or vehicle, as “security” for the loan.
While this makes the loan less risky for banks, it’s much more risky for consumers. Because consumers lose the asset if they fail to repay the loan!