Debt Consolidation: What
to
Look For
You have decided to get a debt consolidation loan to get
control of your monthly budget. This may not solve all your
money problems, but with discipline and a clear plan, it's a
great start. You have even decided, with knowledgeable help,
which type of debt consolidation loan that you need. Now you
need to find someone to put together the loan for you. Where
should you start? What do you look for? Stop panicking. Take a
deep breath. This is just another loan. You can do this.
Debt Consolidation by Refinance
If you have decided on refinancing your mortgage as your
method of debt consolidation, contact your current mortgage
lender. Often, but not always, they can get you the best rates
in the shortest period of time. Also, by staying with the same
company you aren't charged as many fees. If you don't like
them, or they tell you no, you have two options: go find
another lender yourself or find a mortgage broker. Which method
you choose depends on many factors that are covered under "home
mortgages". This method can take two months, so you want to
contact any creditors that are overdo and let them know what is
happening. If they start harassing you, often your closing
company can contact them for you.
Debt Consolidation by Home Equity Loan
The same advice applies to home equity debt consolidation
loans. Sometimes this type of loan comes as a line of credit.
If it does, be sure that it is hard to draw on. You don't want
someone stealing your identity then maxing out your line of
credit against your house. Most identity theft is close to
home, so be very careful.
Unsecured Debt Consolidation Loan
If you decide on an unsecured debt consolidation loan, you
have to decide between lump sum and line of credit. These are
the loans most advertised online. Read the fine print very,
very carefully. Sometimes a line of credit has worse rates than
a credit card. You don't want your debt consolidation loan to
put you more in debt than your credit cards would have.
Who is offering the loan? Don't go to same-day-lenders, Aunt
Bertha, an Internet site link on a porn site or your tax
preparer. Go to either your bank or a reputable website. By
getting a loan from a trustworthy company, you are more likely
to get a good debt consolidation loan for you.
A loan shark is not going to help you get out of debt. And
your family, as well meaning as they are, won't help your
credit rating. Use a lot of skepticism and care when choosing
your lender. If you have a good relationship with your bank,
this is definitely the time to use it. They may even have an
option that you haven't thought of.
Never lose sight that your goal is to get out of debt, not
get another loan. So don't let the debt consolidation loan
blind you to your real goal. If the only loan that you can get
is a bad one, don't take it, find another way. You are smart
enough to find a good deal.
Debt Relief
vs Debt Consolidation
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