#government debt consolidation loans
wiseGEEK: How Do I Qualify for a Government Debt Consolidation Loan?
To qualify for a government debt consolidation loan, you will typically have to meet the criteria of the lending program in question. Usually, these programs are offered for students who have more than one loan and want to make repayment easier. You can likely qualify if you are not in default or delinquent on your payments. Depending on where you are located and the type of loan in question, you may not have to submit to a credit check as you would if you were hoping to consolidate other types of loans. In fact, when participating in a government debt consolidation program for student loans, you may not even need a job to qualify.
Typically, you’ll need outstanding government loans to qualify for a consolidation loan. This means that, if you received a loan from a private institution and it was not backed by a government guarantee, it is unlikely that you will qualify. If you have two or more government-granted or -backed loans that are eligible for a loan consolidation program, however, you may qualify to consolidate your debts.
The first step in qualifying for a government debt consolidation loan is usually learning the criteria of the program in which you are interested. In many jurisdictions, the only type of debt consolidation program available is for people who have student loans. In such a case, qualifying is often very easy. For example, government debt consolidation for student loans is often available without regard to credit history or current income. Likewise, you will not typically need any collateral or a cosigner .
While your credit history and employment status may not figure in your ability to secure a loan, there is one factor that usually proves critical: payment history. Typically, you will be turned down for this type of loan if you are delinquent on your payments or in default on any of your government-granted or -backed loans. Often, however, government student loan programs have measures in place to allow you to catch up on payments and get out of default status. Once you’ve done so, you can typically apply for and receive a consolidation loan.