What to look for in a debt consolidation loan
There are plenty of companies that offer debt consolidation loans, and each of those companies have dozens of different loan options that they can offer to their clients. If you’re shopping for a debt consolidation loan, that makes it hard to choose the company and loan that is right for you. To help you out, we’ve compiled this list of things that you should consider with each debt consolidation company you look at.
Items that should be included in a Debt Consolidation Loan
1. How much money will I save over the life of the loan? This is one of the most important questions to ask, since it’s one of the few ways that you can really compare loans. Ask each company how much they think you can save, and tell your debt counselor that saving money is your highest priority. If you want to get out of debt quickly, the best way to do it is to pay as little interest as possible on your loans.
2. How much money will you save every month? One of the main reasons that many people consider debt consolidation is that they need to get their monthly budget under control. In many cases, that means finding a loan with a low payment that they can actually afford. Usually, a debt consolidation is able to do this with a combination of lower interest rates and longer payment terms. If you currently can’t afford the minimum payments on your debt, debt consolidation is probably your best solution, but you need to understand the terms of the loan that you’re signing up for.
3. What is the reputation of the lender like? A good lender will have debt counselors available to work with you on creating a new budget and finding the right loan for that budget. Bad companies will refuse to answer your questions and try to steer you towards products and loans that you don’t really need or that won’t fit your situation. If a lender will not work with you, find a new debt consolidation company.
4. What do you want from the loan? Figure out what your goals are for debt consolidation before you start applying for loan. Your debt counselor will need to know what your long term financial goal is, and then find a loan that fits into that plan.