How to get a debt consolidation loan in 5 steps
Debt consolidation is a strategy used to simplify your debt situation by combining several debts into a single loan.
It is possible to get a debt consolidation loan with bad credit, but you need to follow certain steps to be successful. To get the best help when you apply for a debt consolidation loan, you have to do your research well. Do your due diligence with lenders and be honest about your financial situation.
Start by finding the best debt consolidation loan company to partner with. To start exploring the options, it is advisable to use a free service company like Sfgate for guidance. Here you will get help through the process of narrowing down your choices. To get it right, compare interest rates, fees, and terms from various companies.
Getting started with debt consolidation
If you’re someone in debt, you’re probably looking for a way out. If so, then getting a debt consolidation loan could be the answer. The advantage of this type of loan is that it will combine all your debts into one manageable monthly payment. Here are 5 steps to get a debt consolidation loan in 5 steps.
- Make a list of your debts
The first thing you need to do is make a list of all your debts, from credit cards to student loans and everything in between. This list will become important later when you start calling creditors or financial institutions to negotiate down payments or interest rates for your new loan.
- Decide whether or not it makes sense to consolidate
Consolidation can be a great option for dealing with mounting debts. However, there are cases where it just doesn’t make financial sense. For example, if you have credit cards with high balances and lower interest rates than the loan you get, consolidation may not help you at all.
If you can’t make the minimum payments on your credit cards now, you still won’t be able to make the minimum payments after consolidating. Therefore, this means that you could end up with more debt than before the consolidation.
- Find out what your current interest rates are
If you already know this information, move on; if not, here’s how to check with each credit card issuer:
- Call the number on the back of your credit cards and ask a representative to give you your interest rates. Some people don’t like talking to collection representatives. However, remember that it is YOUR money that we are talking about. Therefore, call and get these rates!
- Visit the billing statements section of your online credit card account and get the current interest rates listed there.
- Check if you can find a debt consolidation loan at a lower rate
The lowest advertised rates come from Lending Club, which offers debt consolidation loans between 3.49% and 7.07%. It may not be a good idea to consolidate all of your debt at once, but it’s probably a good idea to consolidate what you can.
- Check with your local bank for more information on their loan programs
Get help from local banks on available loan programs. Also try smaller banks that are not open to public investors, as they are often able to offer better rates than larger banks.
Getting the best rates on your debt consolidation loan is possible by using all the tools at your disposal. By making sure you can find a better rate than what you’re currently paying, and then consolidating all that high-interest debt into one low payment, it will be much easier to pay it off in full.
You can save a lot of money by consolidating your debts. However, you need to choose the right debt consolidation company to use. The wrong choice could cost you thousands of dollars, so be sure to read any offer carefully before signing on the dotted line. It is important to avoid falling into another trap with another remuneration system. If you need more advice on how to consolidate your debt, be sure to contact one of our friendly advisors today.