Debt consolidation is a wonderful option when your debt loads start to weigh you down financially. But where can one look for a reliable loan provider?
After all, if you don’t get the correct consolidation loan, you might as well keep digging yourself further into debt.
A reliable debt consolidation service will assist you in eliminating your debt while safeguarding your hard-earned assets. However, if you seek out the wrong kind of debt consolidation assistance, it can have long-lasting negative effects on your credit score and lead to even more debt.
It’s important to seek debt consolidation assistance that’s tailored to your specific needs.
However, there are a few things that must be done before the search can begin.
The first thing to do is take stock of your situation and honestly assess whether or not you can solve the issue on your own through fiscal restraint and cautious budgeting. If you can, sticking with your current lender will save you the time and money of having to find a new one.
If you’ve come to the conclusion that you need assistance managing your debt, the next step is to educate yourself as much as possible about the debt consolidation process.
There is a wealth of data available online about the process of consolidating debt; just make sure it’s reliable. You have two options here;
1) Stick to reputable, well-respected sources only, or
2) Do some research on the topic by visiting several websites. The more you read something, the more likely it is that it is true.
You can better protect yourself from being taken advantage of by a debt consolidation lender if you arm yourself with as much information as possible beforehand.
The last thing to do before approaching a lender is to estimate your rough requirements. This includes the loan’s purpose, amount, and term.
To begin, tally up all of the outstanding bills that your consolidation loan will be paying down.
Two things will happen once you decide how much money you wish to borrow:
a) It will assist you in determining a reasonable loan term. The most effective method is to create a monthly budget that includes a specific amount set aside for debt repayment. When you have this information, you may use a loan calculator to estimate how long it will take you to pay off your consolidation loan. Simply type “loan calculator” or “debt consolidation loan calculator” into any search engine to find dozens of free loan calculators.
b) It will assist you to stay away from excessive borrowing and extended repayment terms. Debt management firms without moral standards frequently employ this practice. They prey on those who are unsure of how much money they actually require. If you have $10,000 in debt and are making $250 monthly payments toward it, a consolidation loan of $10,000 paid back over, say, five years would cost you $195 a month.
Nonetheless, you walk away from the consultation having “persuaded” your lender to extend a $15,000 loan over 7.5 years at an interest rate of $230. That means your debt has increased by 50%, and it will take you an additional two and a half years to pay it off. And it’s all because they showed you how to borrow an additional $5,000 and cut your monthly payment by $20.
Ignore the advice. Determine the amount you will need to borrow and stay with it. Don’t take out more money than you have to.
After deciding what you need, you may begin your search.
The first is to seek the help of a professional credit counselor or broker. They are well-versed in the debt consolidation industry and can recommend trustworthy, reasonably priced service providers. They will also be able to help you avoid the dangers that await the unwary (such as hidden fees, penalties, and so on). In most cases, the fee is justified by the value of their guidance (and the money you’ll avoid losing).
However, if you want to look for a consolidation loan on your own, the Internet is a great location to begin your search. Almost every lender that extends this type of loan has a website.
If you’re looking to consolidate your debt, make sure the lender you choose is trustworthy, has reasonable interest rates, and provides excellent service.
a) A Trustworthy Lender: Inquire with the BBB for recommendations on reputable debt consolidation loan providers. This can also let you know whether the company is under investigation for financial fraud or if there are any complaints pending against them. You can also get in touch with the state’s attorney general’s office or consumer protection agency. The Attorney General can tell you if a license is required to provide the service and if they have one.
Don’t trust “not for profit” businesses despite their claims. But that doesn’t guarantee their dependability or that they’ll give you a good deal.
c) Low-Interest Rates Shop around for a loan by submitting an online form to many lenders. You may get a quote in minutes from several different websites. You’ll just need to fill in a few personal details. After doing this multiple times, you may compare the rates you were offered to get a ballpark estimate of the “going rate” for a consolidation loan. You can use this data to compare and contrast the various proposals you receive.
Online (because of decreased operating expenses) lending institutions typically provide the best interest rates. If you opt for an online offer, though, you won’t have as much opportunity to judge the company’s customer service quality.
c) Customer Service: Contacting a subset of the businesses you come across is the only way to evaluate this factor. Call up the company and schedule a meeting to see what they have to offer in person.
Take this chance to judge the company’s service quality for yourself. When you call, what do they say? Do they really help? What was your impression of the staff and the office environment? etc., etc? Do what you think is right.
Make sure they are the suitable lender for you by asking as many questions as necessary. Don’t sign anything until you’ve confirmed that you’ve located the greatest debt consolidation aid by inquiring about their level of success with past clients.
The time spent looking for a decent debt consolidation loan will pay you in the end. Your very independence from financial constraints depends on it.
author: Stuart Laing
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