Debt consolidation loans: Consolidate your bills with a low rate loan
If you're in trouble managing multiple bills, you may replace all of them into a single debt consolidation loan payable at a low rate of interest. Debt consolidation loans are available as unsecured personal loans and secured loans such as mortgages.
When should you go for a debt consolidation loan?
You may go for a consolidation loan when you're in any of the situations given below.
- You find it difficult to manage multiple bill payments.
- You cannot deal with several creditors at a time.
- You cannot stay current on your bill payments.
- You'd like to replace all your bills into one easy monthly payment.
- You wish to save dollars after making monthly bill payments.
How do you benefit from unsecured debt consolidation loans?
Unsecured debt consolidation loans offer 6 benefits as you'll find below.
- Consolidate bills: Using debt consolidation loans, you can pay off all or most of your unsecured bills (credit cards, payday loans, medical bills etc) at once. You're then left with a single loan, which you'll repay through an affordable payment plan.
- Reduce stress: Paying off multiple bills using a single debt consolidation loan reduces your stress level and helps you to avoid dealing with several creditors.
- Eliminate collection calls: With debt consolidation loans taking care of your bill payments, you can avoid getting harassing calls/letters from creditors and collection agencies.
- Low interest rate: Unsecured loan for debt consolidation is often available at rates lower than the interest rate on your credit cards. So, the monthly payments will be lower than most of your current bill payments. Otherwise, you won't be able to save dollars.
- Long term loan: Low debt consolidation loans (low interest consolidation loans) are usually available for longer term. Low rates and longer term are the 2 reasons why the monthly payments on a consolidation loan are comparatively lower.
- Budgeting gets easier: Unsecured debt consolidation loans help you to replace several bills with one easy manageable payment. Hence, your monthly budgeting gets a lot easier.
- Credit score shines: When you pay off your dues with a single debt consolidation loan, it will have a positive impact on your credit. As such, your credit score will shine.
How do you choose the right consolidation loan?
Given below are 3 tips to help you choose the right debt consolidation loan.
- Shop around: Shop around with a number of financial institutions prior to choosing a low debt consolidation loan. The interest rates on the loans will vary. As such, you need to find which company requires you to pay the least monthly installment on your loan. If possible, try and negotiate a better rate with the companies. Check the company profile and service background also.
- Watch out for the costs: Before you sign on any document, make sure you're aware of the loan costs you'll have to pay. If possible, ask the company to breakdown the costs of taking out a consolidation loan.
- Add up interest and fees: Calculate the monthly payments, interest and charges on your existing bills. Then compare the figure with what you need to pay for the low debt consolidation loan. Make sure your monthly payment on the consolidation loan is much less than your current bill payments.
How do you qualify for the loan?
You need to have a good credit score and appreciable income in order to qualify for unsecured debt consolidation loans. The purpose is to make sure that you can make payments on the consolidation loan in addition to repaying your monthly bills and expenses. Moreover, you won't get such a loan if the total amount you owe is too low.
How much does it cost to take out the loan?
You need to pay certain fees to take out debt consolidation loans. It depends upon the financial institution that offers the loan.
What should you check before you apply for the loan?
Here are the 4 things you need to check before you go for consumer debt consolidation loans.
- Check your credit report: Your credit report will help you identify financial/credit problems that can be eliminated using low debt consolidation loans.
- Total amount due: You need to calculate the total amount you owe. This is essential as because it will help you decide how much of a consolidation loan you'll need in order to pay off your dues.
- Type of bills: You need to decide what type of bills (credit cards, payday loans etc) you'll pay off using the consolidation loan. This is because your total dues can be much higher compared to the consolidation loan amount available. Moreover, you may not include a low interest account, which is easily manageable.
- Plan a budget: You need to work out a monthly budget and find out what amount you can pay towards the consolidation loan on a monthly basis. You should apply for a consolidation loan worth the amount that's comfortably payable.
Are there any disadvantages of a consolidation loan?
Usually, unsecured debt consolidation loans (low debt consolidation loan obtained without owning a home) involve longer repayment term. So, even if your monthly payment is low, you actually end up paying much more in total interest throughout the longer term. Moreover, Unsecured debt consolidation loan doesn't provide you with any tax benefit. This is because the interest on a personal loan is not tax deductible just as the interest on a mortgage loan.
There's no doubt that low debt consolidation loans help you to consolidate all your dues into a single manageable payment. On one hand, it helps to bring your finances back on track while on the other hand, it creates a positive impact on your credit. However, in case you don't qualify for debt consolidation loans, you may consider debt consolidation program as a way out of your debt problems.
Related Forum Discussions
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#1
09-30-2005, 08:32 AM
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Debt consolidation loans: Consolidate your bills with a low rate loan
I was talking to a bank and it turned me down for a loan.
How can I get unsecured debt consolidation loans to pay some old bills? The bills amount to around 3500 and right now whatever i earn is spent and there is no money left to pay back the old bills, any help will be appreciated. VK 
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#2
09-30-2005, 12:40 PM
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Quote:
http://www.debtconsolidationcare.com/benefits.html Once you recover your financial credibility, you become eligible for loans with low interest rates.
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#3
09-30-2005, 03:33 PM
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Senior Member
Join Date: Mar 2005
Posts: 4,127
Credits: 51,500
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unsecured debt consolidation loans
Vincentkallis
Welcome to the forums. Since you are looking for a new loan, the three digit credit score is the most important factor to analyze your financial worthiness. Based on these credit scores, loans or credit can be acquired from the creditors and other lending agencies. When the credit score is evaluated, extensive research is conducted on the following areas of your credit report.
Since you said that the money you earn is simultaneously spent, you need to follow some good budgeting tips that will help you to keep a check on your finance. Also, even if you are granted loan, you might be adding further debt on the existing ones. This will increase your debt to income ratio and the overall expenses as you will have to pay the interest twice. There are some types of loans that require property to be pledged against it. These are known as homeowner debt consolidation loans. If you miss any of the payments, you might be at the risk of losing your property. Considering all the mentioned facts, consolidation program will be a better choice for you at this stage. When you will use this program, the consultant will contact your creditors and get the interest rate and monthly payments reduced by a considerable margin so that you are able to pay it realistically. The consultant often knows the key contacts at the place of the credit companies. He works whole heartedly so that you get the best deal. Let us take a hypothetical situation where a person is having a debt of $8000 with a major credit card company and the interest is offered at 22%. Considering the advantage of the debt consolidation program, the consultant will be able to lower the interest rate and the monthly payments significantly. A skilled consultant working in the program will be able to reduce the debt by a margin of 40% to 60% and eliminate all the financial charges and the late fees. Thus, the consumer will not have to pay the insurmountable interest fees in such a program and the payment will be going towards what is owed. The bonus of this program is that you won't have to write numerous checks to your various creditors. You will have to write only one check and that will be in the name of the debt consolidation company with whom you are working. Thus, all the payments are consolidated into one loan amount and the trained consultant will further deal with your creditors in the rest of the program. You will be sent statements of your monthly payments made to your creditors and thus you will be able to see your debt shrinking each month as it gets paid off. Please read the page given below to know more about this program and know your better options. http://www.debtconsolidationcare.com/benefits.html If you have any queries regarding this matter, do not hesitate to post it here. Regards Roxette __________________
Debtconsolidationcare offers free counseling and help, please avail the services before taking any major decisions.
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#5
10-20-2005, 07:13 AM
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Sub:
Borrowing money to get out of debt has been a big mistake for a lot of people. I'm telling you that out of experience. God I wish my debt was only 3500...it used to be and then out of nowhere it was much much more. Then I started borrowing money to pay off my credit cards and it was all down hill from there.
Good Luck! -Sarah
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#6
10-20-2005, 02:33 PM
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debt consolidation loans against property
Some debt consolidation loans also require property to be attached against it. So, if there are defaults, we might lose that property attached to the loan. Keep yourself away from the loans especially for paying your debts. You multiply the amount of debt all together.
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#8
01-10-2006, 09:50 AM
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John,
Go through the link below, it might help you in searching a legitimate lender. http://www.debtconsolidationcare.com...-resource.html Beware of the lenders willing to work with you despite of the fact that your credit is not so good. Also be alert if a lender asks for some fees in advance. Read this entire thread carefully and browse this forum too- http://www.debtconsolidationcare.com...oan-scams.html Feel free to ask your queries in the forums 
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#9
01-31-2006, 10:22 AM
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Guest
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Hello,
I am currently going some financial hardships that I can't seem to find an answer to. I work between 50-55 hours a week and the take home pay is not enough to pay all the bills & put food on the table. As it is, I am behind on several payments and to top it all off I have bad credit. Prior to this job I was unemployed for almost 2 years so I maxed out 2 credit cards with daily life: food, transportation for interviews, gas, etc. I pay up to wazoo but can't seem to lower the balance. They've also raised my minimum to almost $400, which I can't comply with. If I get rid of those credit cards and my car payments (which sum to up to approx. $13K, I would be in a much better position to handle my debt, I think. I doubt I could get a loan with my credit history, so should I go for unsecured debt consolidation loans? Sometimes I think I'm drowning in all this debt and I don't know how to get out of it. Any advice will be greatly appreciated! Thanks!
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#10
01-31-2006, 10:43 AM
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Keira,
A loan cannot be the solution for loans. First, no one will be willing to lend you money at this stage, since your credit is not so good. As a result you might have to put some collateral against the new loan and there is a risk of losing this property if you become defaulter in future. When the topic is loan vs. debt consolidation, I will always vote for debt consolidation. The process is technically correct and it will lead you towards a debt free life ensuring a good credit. You can sign up with this site to have a free consultation. The professionals would be able to clarify all your queries after analyzing your debt and income thoroughly. See the benefits of debt consolidation here: http://www.debtconsolidationcare.com/benefits.html
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#12
04-21-2009, 10:17 AM
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I do not know about "Car Loan" consolidaters. You may be able to refinance your car loans through your bank and/or credit union for a lower rate.
__________________
"We are what we repeatedly do. Excellence, then, is not an act, but a habit." -Aristotle-
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#13
04-23-2009, 11:07 AM
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Member
Join Date: Apr 2009
Posts: 136
Credits: 1,326
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If you were already denied, it's unlikely you'll get another loan. Your best option is to cut expenses and try to save money so you can pay down some of your debts. I wouldn't try to add another loan on top of it all, it could just get you in deeper than you are right now.
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#14
04-24-2009, 05:16 AM
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I agree. Another loan could put you in a dangerous situation with debt and also harm your credit. I never was a fan of unsecured debt consolidation loans
__________________
"We are what we repeatedly do. Excellence, then, is not an act, but a habit." -Aristotle-
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#16
01-28-2010, 08:52 PM
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Guest
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Loan offer
I am a private loan lender by Mr Paul Parkman,i give certified loans to serious
minded individuals and company at an interest rate of 3% with total loan repayment allowed weekly monthly or yearly depending on how you can make repayments if interested email me at paulparkmanloanlendercompany@gmail.com We only offer out in: Dollars,Pounds,Euro and Naira only.Apply with the following details:Name,Address,Cell number ,Occupation,Monthly income,Loan amount needed&Duration.  aulparkmanloanlendercompany@gmail.com
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