How to get a Debt Consolidation Loan
In order to get a debt consolidation loan, you will need to first add up all of your debts, including all credit cards and personal loans. You should next check interest rates. What are you paying in interest for each credit card and loan? Once you’ve established this information and recorded it, take it to a lender. Contact several, in order to compare each of their loan products. You can find lenders in the yellow pages or ask for a referral from a local real estate agent. You can also check the Internet for lenders in your area.
When you have a list of lenders, you’ll want to determine which lender has the best consolidation loan that will fit your needs. All loans vary in interest rate length amount loaned and type of interest rate (adjustable or fixed). The rate of interest and which loan program you’ll qualify for are dependent on your income, credit and equity.
The next step is to complete a loan application for the institution you have chosen and supply all the requested documents. You will also need to submit copies of your credit card and loan statements that you intend to pay off. Completion of your loan process should take approximately three to four weeks.
Some warnings and tips: Your lender will likely require your credit cards and personal loans be paid off through escrow, meaning that when you close the loan and you have gotten your new consolidated loan, all your old balances will get paid off. The interest you pay on a loan secured by real property, such as your home, is deductible but the loan balance(s) cannot exceed the value of your property. Keep in mind: the purpose of getting a loan consolidation is to reduce the overall amount of your monthly payments and interest. The interest that you pay on a personal loan or credit card is not tax deductible.
