Search
Recommended Products
Related Links


 

 

Informative Articles

Consolidating Your Credit Card Debt
Copyright 2005 MHG Consulting Credit cards have revolutionized the purchasing experience since Diners Club released the first credit card in the year 1950. The Dinners Club credit card gave consumers limited credit that, at times, even surpassed...

Debt Consolidation
There are many reasons why people get into debt - some of them self inflicted and some of them way outside of our control. Losing a job, illness or accidents, all of these can suddenly plunge one into unexpected expenditure, and often the only way...

Debt Consolidation 101
Debt consolidation occurs where one takes out a loan in order to pay off two or more existing debts. Consolidating existing unstructured debt into one personal loan may save on your monthly outgoings while, at the same time, offering a repayment...

Debt consolidation mortgage - decode its apparent complexity
Someone great once said that ‘if it isn’t the sheriff, it is the finance company’. Do you feel the same? Has the piling up of bills forced you to take several loans? Do you live in constant dread that someone would soon come to claim his money. The...

What is Debt Consolidation?
Here is a useful guide to what is Debt consolidation. For some people with credit problems debt consolidation may be an answer. Debt consolidation is borrowing enough money from one lender to pay off all your debts. When you consolidate: You make...

 
Google
Consolidating Debt - How To Get The Lowest Interest Rate On A Debt Reduction Or Consolidation Loan

To get the lowest interest rate on a debt consolidation loan, you need to research terms and rates. Lenders realize to remain competitive, they must offer low rates. A difference as little as a quarter percent can save you hundreds a year. The type of loan you choose can also have significant financial repercussions.

Picking Your Debt Consolidation Loan

You have two options for a debt consolidation loan - secured or unsecured. Secured loans are backed by property you own, typically your home. You can choose to refinance your mortgage to pull out your equity to pay off your bills. You can also use a home equity line of credit to consolidate your debt. With both types of loans, the interest is tax deductible.

Unsecured loans, such as personal loans, have no collateral, so interest rates are higher. You can expect to pay a couple of percentage points higher than prime, depending on your credit score. You will also need to have a steady source of income.

When you pick the type of debt consolidation loan you want, consider all the financial factors. A secured debt will involve fees. You may also find that interest rates are higher than when you first received your mortgage. However, you need to remember their tax advantage. For large debts, a secure loan usually is the best choice


with a longer period to recoup the cost of fees. Unsecured loans are ideal for those who don't have property or have smaller debts.

Finding Lenders

No matter if you are looking for a secured or unsecured loan, the principles for finding a lender are the same. Start by requesting quotes and terms from several lenders. You may be surprised to find a lesser known lender offers far better rates than national financing companies. Also, use the internet to speed the process by requesting information online.

Besides rates, request information on fees - both up front and any early payment fees. This information will help you determine the true cost of the loans.

Once you have found a few potential lenders, investigate further for discounts and customer service. You may find a lender who offers discounts for applying online or being a first time borrower with them. If all factors are the same, select the lender that you feel most comfortable with and is easy to contact.

About the author:

See my recommended Debt Consolidation Companies online.  Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.