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Can I do Debt consolidation Loan on my own?

Can I do Debt consolidation Loan on my own?

While researching debt consolidation, some people begin to wonder if this is something that they can do without going through a bank.  After all, debt consolidation is simply replacing a lot of credit cards with one loan.  Why not look for a loan on your own?

What to know prior to a Debt Consolidation Loan

The truth is that for people with very small debt loads, finding your own debt consolidation loan might be a good option.  This is more commonly referred to as a balance transfer; you will find a credit card with a lower interest rate than your current card and simply transfer the balance on your old cards to your new one.  

The problem with this is that a glance transfer typically costs between 3 and 5 percent of the total loan balance.  This starts to become a significant amount when a person owes thousands of dollars.  People who owe a lot of money will also discover that it can be next to impossible to find a credit card with a high enough credit limit to transfer all of the balances from several different credit cards.

For many people, debt consolidation through a professional company is a simpler and cheaper option.  Since the credit cards are paid off, not simply transferred to a new card, there are no fees involved like there are with a balance transfer.  Furthermore, larger loans are available.  It’s very common to find a loan for $10,000 or more, and there are loans of $100,000 or more available.  

Because all applicants for a debt consolidation loan have to got through debt counseling, banks are much more likely to view candidates for debt consolidation loans as a better credit risk than candidates for other types of loans.  This means that many people find a debt consolidation loan with an interest rate that is a lot lower than what they would have found on their own.

Finally, debt consolidation with a professional company means that another person is dealing with the hassles of getting your old loans paid off and finding a new loan with terms that will save you money.  You are much more likely to find a loan with a lower monthly payment and a lower interest rate than what you would find by searching on your own.

About Author: Debt Help Desk

There are tons of sites and articles about getting out of debt. We are different because we are not a site owned or operated by an actual debt relief company. No bias. Our agenda is to help people make smart debt relief decisions- Now let’s help you.

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