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Seeking a Debt
Consolidation Loan?
by Christopher M. Luck
Would you like the convenience of making just one monthly
payment for all of your credit card debt? Do you have a
home which has appreciated greatly over the past few
years? Are high interest rates and late fees bogging you
down? Does it seem like each paycheck is eaten up by
payments on revolving debt? If your answer to any of
these questions is yes, you may be a candidate for a debt
consolidation loan.
Debt consolidation loans are not one size fits all. They
are tailored to the needs of the individual situation and
answer specific needs. People with excellent credit seek
debt consolidation loans and people with sub par credit
also apply for them. People who have expensive homes with
equity that can be tapped ask for debt consolidation
loans as do people who rent their homes. The key to
looking for a loan to consolidate debt is assessing your
own peculiar circumstance and trying to find the debt
consolidation loan that is suitable for your situation.
First, what is the state of your credit?
Even if you are not considering applying for some sort of
debt consolidation, it is always good to know how your
credit is faring. The law requires that each person
should be allowed one free credit report each year.
Always avail yourself of this freebie. Contact each of
the three credit reporting agencies (TransUnion, Experian
and Equifax). While you’re at it, purchase your
credit score (FICO) for a small nominal fee. Check your
report and report any errors to all three agencies. If
your FICO is 720 or above you have excellent credit,
below 600 and you have fair or, by some standards, even
poor credit.
Second, why do you want a debt consolidation
loan?
Consumers who are just tired of a stack of bills to be
paid every month but otherwise have no credit problems
should be able to consolidate their debts quickly and
easily. A call to the bank with which they do business
should suffice. They should just be sure that the loan is
for an amount equal to or less than their current bills
and that there are no penalties for paying off any of the
bills they plan to roll into the loan.
Home owners with equity built up in their homes who have
any sort of credit should be able to use some of the
equity from their houses to pay off their high interest
debt and roll the balance into their mortgages. There may
even be cash left after the new mortgage is financed.
However, these people should take care that not to make a
habit of using their home’s accrued value in this
way. Numerous debt consolidation loans based on a
homeowner’s equity will eventually sap the value of
the home and possibly even put the home itself in
jeopardy.
People with fair or poor credit may have a more difficult
time obtaining a debt consolidation loan. They may have
to resort to using a sub par debt consolidation service.
The interest rates and fees charged by these institutions
will undoubtedly be higher than those charged to others
with better credit. Still, even a slightly above standard
interest debt consolidation loan may relieve some of the
person’s debt burden if the term of the loan is
longer than the terms of the current indebtedness.
No matter what your credit or the reason you apply for a
debt consolidation loan it is important to control your
spending once you bills have been consolidated. Consider
cutting up all but one of your credit cards. Even the one
credit card remaining should be put away in a secure
place and used only in case of an emergency or such true
financial bind. An important part of debt consolidation
is not to put yourself in the same place a second time.
Christopher
M. Luck has an extensive background in working
exclusively with some of the top debt consolidation
companies and for the first time ever he is now offering
free debt consolidation secrets to the public. If you are
at all interested in Christopher's advice, tips, or
secrets, you can visit his debt blog
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Management
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