|
|
 |
| Homepage
> Mortgage > |
Debt
Consolidation Loan Any takers for Cheaper Loans |
Finding a wrong debt consolidation loan could
land you in deeper debt woes instead of offering you relief. Every
cent counts when you are struggling with debt. For many folks,
looking for a debt consolidation loan for the first time can be a
daunting task. I will share with you some quick tips on what to do
when selecting a loan to consolidate your debts.
Securing a
loan to quickly relieve your debt can be an emotional decision, but
it is important to note that rationality and practicality must rule
so that you can weight the pros and cons in your decision making
process. Do not just jump into any loan that is readily available to
you.
One very critical factor to consider in all debt
consolidation loans is the rates and terms of conditions offered by
debt consolidation loan companies. This whole business of
consolidating debts is a huge and fiercely competitive one. You
should be able to compare the rates among these financial companies,
ie lenders and sieve out those which are low and affordable to you.
Before you settle for a loan, be sure to look at the two main
options available ?secured and unsecured loans. Secured option
requires you to pledge collateral. What is suitable as collateral?
In most cases, the house is used as collateral in order to secure a
loan. The advantage of this option is the tax-deductibility nature
of the loan interests. The repayment period also tends to be longer
and this would buy you some time to take a breather and slowly repay
your loan.
However, since this may involve mortgage
refinancing, there could be expenses you have to fork out, and the
subsequent refinanced interest rate you have to pay could be higher
than the original mortgage rate. This might not be what you can
afford. So you really have to consider it carefully.
If you
feel uncomfortable with using your home as collateral or simply
don't have collateral, there are always unsecured loans for you to
fall back on. Since this option is considered to carry higher risks
to the lenders, you can expect the interest loans to be higher in
most cases. The lender will assess your case before granting you the
loan. Your credit rating and other factors that directly influence
your ability to repay your loan such as whether you are holding a
stable job, has any medical history of ill health etc would affect
your eligibility for the debt consolidation loan.
Unsecured
loans are a better option if your debts are small and can be repaid
within a span of few years.
One final step before applying
for any loan is to perform a ratings check of your prospective
lender at loan rating websites such as www.debtconsolidationcare.com
or www.bankrate.com. Read the reviews posted by those who have used
a debt consolidation loan company, or lender. These are honest
comments given by folks who are or have been in the same debt
situation as you.
|
|
|
|
