Consolidating your debts can make it a lot easier to keep track of your finances. Making a single monthly payment allows you to stay in control of your debt and your monthly finances. A nice reduction in the amount of interest that you pay each month will also lower your overall monthly payment. What are some strategies that can get you the best rate on your loan?
Start with a Credit Union
The best rates on debt consolidation loans could very well come from your local credit union. Credit unions traditionally have less pressure to make a profit and offer lower interest rates on loans as a result. It might make more sense to look into going to a credit union if you have less than perfect credit. You might not qualify for the best rates the credit union has to offer, but it wouldn't be a shock to get a better interest rate than you would see at a bank.
Use Your Equity To Score A Great Rate On Your Loan
Taking out a home equity loan could be a great way to make sure that you are getting the best deal possible. A debt consolidation loan using your equity has a few advantages to offer you. The first advantage is that your interest rate is going to be lower because you are securing the loan with your home. Another advantage is that a home equity loan will not impact your credit score in a negative fashion as long as you stay current on the loan.
If You Have Bad Credit Or No Credit History
What should you do if you have bad credit? Getting a good interest rate may not be possible, but you should still check to see what kinds of loans are available to you. There are plenty of lenders out there who are willing to do loans with those who don't have the greatest of credit scores. Go online and search out a lender that you might want to work with. You never know when you will stumble upon a loan with a better interest rate than you thought was possible with your credit score.
What About A Borrower Who Rents An Apartment
What if you do not own a home? There is a myth out there that a potential borrower who does not have a home cannot get a debt consolidation loan. This is simply not true at all. Unsecured consolidation loans are available for those who fall into this category. Make sure that you have a great credit score if you do not have equity in a home. Unsecured loans tend to set the borrower up to a higher standard when it comes to repayment. This is because there is no asset to sell off in case of non-payment.
Other Consolidation Options To Consider
How else can you go about consolidating your debts? Consider transferring your credit balances to a lower interest credit card. A debt settlement could also be a great way to consolidate your debt if you cannot get a traditional consolidation loan. Debt settlements can be paid off in a single lump sum or over installments. Picking a plan that works for you is important. Also if you need insolvency help, debt recovery advice, company rescue, you can get many other options online.
Getting the best rate on your loan should be the goal whenever you borrow money. Having a good credit score and equity in your home can make it much easier to get the lowest rate possible on a loan. However, a good credit score or going to a credit union should be good enough to get you a really good rate on your consolidation loan.