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Getting Approved For a Loan If You Don’t Have Assets For Collateral

We find that there are consumers that come from all walks of life and have a variety of problems obtaining loans and mortgages. Our current applicant has a good credit rating, a relatively secure job (as much as any job can be secure these days), and he has skills that are transferable from employer to employer. He owns his own home and car. The car is paid for, but unfortunately it is an older model and not worth too much and therefore cannot be used for collateral for a loan.

He has a mortgage on his home. He does not have sufficient equity in the home to use as collateral either and therefore is faced with interest rates that are based on unsecured loan rates.  The loan is to cover some credit card debt for the total amount of $10,000. He does not have enough equity and will need to pay slightly higher interest rates, however these rates are substantially lower than what he would pay if he were to leave the debt on his credit card. The rates are at least 10 points higher and cost a great deal more on a monthly basis.

This situation is actually pretty common with many consumers not having the equity to use as collateral for loans that they wish to be approved for. For consumers that do have collateral, this means they can obtain lower interest rates in return for placing this collateral with the lender or signing it over to the lender. What this situation really means is that if the borrower for some reason cannot repay the loan, or does not repay the loan, the lender can sell the collateral to recover the remaining balance of the loan plus the cost of processing and selling the collateral. Before you offer collateral, consumers should always be sure that they can repay the loan based on the terms of the loan without ever defaulting on the loan.

We believe that this client can meet all of the obligations of this loan and will likely be approved for a loan, however the interest rate may be higher than he would like.


Home/Mortgage Loan Amount :: $10,000

Home Loan Application and Processing Speed (when do you need the funds):: I need to have the proceeds of the loan by the end of the month to pay the balance on my credit card account.

Do you currently have a mortgage? :: yes, however there is not enough assets for collateral in my home to cover the loan.

Bank Name and Branch ::Chase Bank, Main St

What City/Town, State and County do you live in? :: Barstow, California

Zip :: 92311

What is your employment field? :: Truck Repair Mechanic

Employment Position :: Heavy Equipment Mechanic

When are you paid? (monthly/weekly/biweekly):: biweekly

Your credit rating to be – excellent, fair, or bad? :: fair to excellent

How did you find us? :: Searching for loans online from online venders.

How are you paid? (direct deposit/paper check):: Direct deposit

Gross Amount Per Paycheck ::$2,153.84

Do you agree to have this information published online, without your PRIVATE information of course? :: sure as long as you retain my private information and do not let it be shown online in any search results

Extra information here please (some detail):: I am a heavy equipment mechanic living in Barstow, California. I have been working in this profession for a number of years and have been quite successful at always finding work whether it is at the current shop where I work or moving to a new shop if the contracts moved. In this industry, it is quite common for large equipment operators to move their contracts from one repair shop to another based on contract rates and service. When this happens, it usually means the mechanics get laid off at one place and get rehired at another. This has worked for me for the past 10 years.

My credit rating is very good and I would like to borrow some money to pay down some credit card bills that we have. I spent some money on house repairs and expected to have no problem getting a low interest loan when I needed the money. Turns out that you must have collateral to obtain a low interest loan. I do not have assets for a collateral loan at the present time.

Note to Lender :: We just purchased a new home in the past year and have not built up sufficient equity in the home to cover the loan as of yet. Our car is paid for, but it is not worth a whole lot and we do not have sufficient equity to cover this loan.

As a result the interest rates for the loans that we can get are based on higher rates. I would like to find a competitive loan interest rate for someone with no collateral. All we need is $10,000 with a five year term or longer. This will allow us to avoid paying the high interest rates that credit card charge at 19% or higher. Can you assist in finding us a broker or lender that will approve a low interest loan with no assets for collateral?


Category: Home Mortgage Loan APR 2.24% APR 3.06% APR 5%
Loan Principal $10,000 $10,000 $10,000
Payment Schedule Monthly Monthly Monthly
Length of Term 5 6 5
Amount to be paid $10,569.23 $10,930.58 $11,270.59
Total interest paid $569.23 $930.58 $1,270.59
Paid per installment $173.74 $149.73 $185.27