Unitranche debt consolidation is a type of home loan that combines all existing loans into one interest-only loan, without requiring any credit checks, collateral, down payments, or any other type of collateral or “security”. This is a great option to consolidate debts that allows you to be free from the hassle of managing multiple accounts and can often be paid off in as little as a few months. To understand what it is and how it works, you need to take a close look at Unitranche debt consolidation.
The first thing to understand about this type of debt consolidation is that it is not like a traditional secured loan. Instead, it consists of several different kinds of loans all of which are secured with the equity of a single property and are made to a single account, usually called an “asset account”.
The idea is that you will be paying lower monthly interest rates for your existing debts, and you will be able to pay them all off at once. By consolidating these debts together, you will not only have fewer loans to manage, but they are also all paid off much faster. When you do this, you are basically transferring your debt from one account to another, and this makes it easier to manage. Once all your debts are paid off and consolidated, you will only have one payment to make each month and that is usually lower than the combined payments that you were paying previously.
The benefits to using this type of financing are that it does not negatively affect your credit scores and that you do not have to submit to any type of credit check. There is no collateral required to obtain this type of financing, so there are no risk factors involved with using a traditional secured loan. The only thing that needs to be done to become approved for a Unitranche loan is that you must be at least 18 years old with a steady source of income and have a job or an independent source of income (such as a business) that pays you enough money each week to be considered a primary wage earner.
A great benefit of using Unitranche financing is that you can get a lower interest rate and a longer time period to pay off your debt. Usually the shorter the time period is, the lower the rate will be. This is because you will have to pay off the loans over a longer period of time and you are able to spread the total amount of debt out over a longer period of time and therefore have more disposable income to pay off the loan more quickly.
Before getting a Unitranche loan, it is important that you understand that it is a high risk lending vehicle. You should always research the company that offers the financing before you get a loan. Find out if the company has been in the business for many years and that it is a well known one that are not just starting out as a start-up firm.