You may be asking yourself “How can I get a debt consolidation loan without owning a home?”  Debt consolidation is a great method to pay down higher interest rate loans, and to consolidate all your bills into one monthly payment.   Debt consolidation also makes it less to worry about when it comes time to pay bills.  You will only have one monthly payment instead of five or six that you currently pay.

If you are currently making your monthly payments with no problem, you can still increase the amount of extra cash that you have each month by consolidating your debts.  Instead of paying interest to all your lenders, you would only be paying interest on one loan to one lender per month.  This allows you to pay the principal down in a shorter amount of time instead of paying mostly interest.

So where do you start?  A great first step is to educate yourself about the options that you have.  The Internet is a great resource when it comes to researching available debt consolidation loans.  Browse the internet to get an idea of the interest rates that are out there, the different types of loans that are offered, and the application process.  Educating yourself will help you throughout your loan process, and help determine what option is best for you.

One option for a debt consolidation loans for non homeowners would be a personal or secured loan. Ask yourself if you have anything that you could use as collateral. For example, do you have a car that is paid for with a clear title you could use the car as collateral? Using collateral will get you a lower interest rate since the financial institutions have a means to collect on the loan if it would default. Most financial institutions will give you the interest rate that they offer for used car loans. You could possibly get interest rates as low as 4.5% APR.

If you do not have anything that you could use as collateral then you can look for unsecured or personal consolidation loans. You should shop around for the best interest rate and for the loan that best suites you. For an unsecure (no collateral) loan with excellent credit you can find consolidation loans around 11.00% APR. If your credit is not the best, you may get interest rates in excess of 18% APR. When looking for an unsecured debt consolidation loan you should be cautious, and always read the fine print. You should ask if there are any fees if you pay the loan off early, how much will go to the finance charge and to the principal when you make monthly payments, and what is the penalty for late payments.

If you have credit cards that you wish to consolidate that have high interest rates, and then look for other credit cards that off a 0% APR balances transfers. Doing this allows you to continue to pay on your current debt, but without the added interest. Keep in mind that after your introductory 0% APR is up, you may get a higher interest rate than you previously had. You will need to keep track of when your introductory rate is up, and start shopping around for another 0% APR credit card you could transfer your balance to. When looking for a low interest credit card check to see if there are annual fees, or extreme interest rate increases when you are late on a payment.

Let's look at the following example.

John has four credit cards that he is currently paying on.
Card A has a $4,000 balance with an 11.99% APR.
Card B has an $8,000 balance with a 19.00% APR.
Card C has a $6,000 balance with 9.99% APR.
Card D has $2,550 balance with 14.99% APR.

Currently John is paying approximately $483.00 per month in Credit Card bills.  By doing debt consolidation loan without owning a home John’s monthly payments could drop to approximately $400.00 per month for a personal loan for 60 months (5 years) with a 7.00% APR.  That is $83.00 a month that would be free for other expenses.  Not only would John be saving money on the monthly payments, but also on the life of John’s loan.

Currently, John is paying interest to each of his four lenders monthly.  Combined he is paying 56% interest for the month.  With the debt consolidation loan John is only paying 7% APR a month, and will have his debts paid with in five years.  Without debt consolidation it would take approximately 312 months to pay off his credit card debts making the minimum payments.  That is twenty-nine years, almost the amount of time for the average home loan.

As you can see getting a debt consolidation loan, even without owning a home, is a great way to save money immediately and in the future.