A Guide to Debt Consolidation Loans

Comments (20)


A Guide to Debt Consolidation Loans

By: John Mussi

Should you find yourself overcome by debt, you might want to consider debt consolidation loans. These loans are designed with the person in debt beyond their means in mind, allowing for repayment of the outstanding debts while combining multiple payments into a single affordable monthly payment.

Debt consolidation loans can be applied for at most banks or lending institutions, with some even specializing in debt relief and consolidation.

Debt consolidation loans consist of a loan that is equal to the either the total amount of your outstanding debt or to a significant portion of it, and allow you to pay off that debt so that you have only a single debt remaining... the loan itself.

Collateral and considerations

Since applying for debt consolidation loans means that you have some amount of debts that you wish to consolidate, there's a good chance that your credit is less than perfect. If this is the case then you're probably going to need some form of collateral, or property that you put up against the loan that the lender will be able to sell to get their money back in case you don't pay the money back.

Collateral for debt consolidation loans can be a clear automobile title, the deed to a house or other real estate, or other forms of valuable property (though cars and houses are the most common forms of collateral.)

When applying for debt consolidation loans, you should first decide exactly how much money you need to borrow... usually, this will either be the total sum of your debts or the sum of the biggest debts that you have.

The amount that you need will help to determine what sort of collateral is appropriate for your loan, and will also be a major factor in determining the interest rate and monthly payment that you'll get in order to pay the loan back.

Limitations of debt consolidation

Different lenders have different rules for debt consolidation loans... some have a minimum amount that you can borrow, and almost all have maximum amounts (which are usually based upon the value of your collateral.)

Many lenders that specialize in people with less-than-perfect credit will offer very flexible terms for debt consolidation loans, since that's where they get a lot of their business. Unfortunately, you often tend to have a slightly higher interest rate when dealing with these flexible terms.

In the end, debt consolidation loans can be a godsend to those who may have felt that there was no way out of their financial problems. The loans can get your debt under control so that you have a single payment to make, and might even help you avoid bankruptcy... a place that no one ever wants to go.

Thanks to the ease of consolidating your debts with debt consolidation loans, you won't have to.

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You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.

Comments

Brad M 11.06.2008. 18:03

Anyone know any good way to get a decent debt consolidation loan? I want to get a debt consolidation loan, WITHOUT using my home equity, but they are telling me my credit score is great, but by ratio is too high. Well, I want to consolidate all the CC debt I have, but it's running me in circles. What's the point of trying to get a consolidation loan if they won't lend it to you because you have too much debt? Does anyone know of ANY bank or anywhere I can turn to that understands and can try and help me? Thank you for your help!

Brad M

Admin 11.06.2008. 18:03

Brad;

You say that you don't want to use your home equity as collateral for a loan so I am going to assume that you own a home and have equity in it. If this is the case then perhaps you should consider a home equity loan in order to consolidate your CC debts at a lower interest rate. You will likely be able to further reduce your monthly debt payments by stretching out the term of the loan. In addition, if you live in the U.S. the interest that you pay on that home equity loan might be tax deductible. Find more information on this here... http://www.debt-elimination-guide.com/debt-consolidation-home-loan.html

If you don't have any home equity then your options become limited. Your best bet may be to contact your credit card company(s) and ask for a reduction in the amount of interest you are paying as well as a reduction in the amount that you are paying each month. Most CC companies will work with you on this and you can sometimes achieve results similar to what you were hoping to achieve with a new loan. The credit card companies would rather have less interest and a slower payback period than a total loan write-off. There are also companies that can help you with this if you don't feel comfortable doing it yourself. In fact, some will give you a free debt analysis before you commit to anything.

There are some other options available as well, but it doesn't sound like they would be suitable for you at this time. If you would like a recommendation on a few good companies and information on other options you can find that here... http://www.debt-elimination-guide.com/debt-elimination-options.html

Regards

Bruce

Admin

J T 20.04.2009. 20:45

Who do you recommend for a good debt consolidation service? Any personal experiences? I have approximately $15K in various credit card and hospital bill debt. I am looking for a good company that does debt consolidations/loans.

There are lots and lots of companies available but i've heard there are both good and bad ones out there. Personal experiences are highly important so if you have any - please share them.
Also, is there any rating/review service or consumer guide that has written about this field? Web Links?

J T

Admin 20.04.2009. 20:45

I have experience of credit card debt..At that time I took the the help of the debt consolidation service help..But then After I realized that it would be better if took debt settlement service instead of deb consolidation. So just visit the debtconsolidation123.net. It's really great.

Admin

SUNNY-JADE 04.06.2008. 21:58

Does anyone know of a lender willing to help with debt consolidation for poor credit? I have been working very hard to improve my credit score and have had to make several personal loans to do so. Now I have a lot of different payments with high interest rates. I would much rather have one payment with one interest rate.

SUNNY-JADE

Admin 04.06.2008. 21:58

The type of loan you wanted is poor credit consolidation loan. Since you have a poor credit forget getting this debt consolidation loan from a bank. You have to try private lenders and credit union. With so many lenders and loaners and scams it is so frustrating to select one that can really suite your need. But you can get this done from the comfort of your home. That is to search online. Visit the lenders website, do some research and apply online when you are satisfied.
I hope http://loan-guides.net will help you in getting poor credit consolidation loan online.

Admin

justlise 22.06.2008. 11:53

Can anyone suggest a reputable debt consolidation program? Or are there other options I should be looking into? I am close to $60,000 in debt and make very little money. I hate to just pick a co. from an ad.

Bankruptcy is not an option available to me.

justlise

Admin 22.06.2008. 11:53

60 K is a big debt to have with you. It is a wise decision that you avoid bankruptcy, as it will ruin your credit for atleast 7 years.
There are many banks giving debt consolidation program but they will give you loan only if you have good credit. They also have hard documentation process. So it is better to have touch with private lenders. There are many private lenders in internet. They give you loan for bad credit to consolidate your debts. We see a number of websites each and every day. Just visit their website, read a little bit. There you will find a form. Fill it with all details and they will contact you if you qualify. My cousin got debt consolidation loan from a internet based lender in just 3 hours. All the process was in internet. Just a phone call and few verifications.
I hope http://loan-guides.net will help you in getting a bad credit consolidation loan.

Admin

MEC 14.06.2007. 16:55

Where should I go to get help with debt consolidation? I have really bad credit, I am in debt and I already have a home equity loan.. where can I go for help?? I want to avoid bankruptcy. Please help.

MEC

Admin 14.06.2007. 16:55

Call the American Consumer Counseling Center - unlike a lot of those "debt solution" places, this is a non-profit and won't take your money. They can give you some great counseling and advise you on the best options for your particular situation.
American Consumer Counseling Center
http://www.consumercredit.com/ or 1-800-769-3571

Also, get down to your local library tonight and start checking out personal finance books - they can be wonderfully empowering and inspiring, and many are written in simple English.
-The Complete Idiot's Guide to Personal Finance in your 20s and 30s
-The Complete Idiot's Guide to Managing Your Money
-Smart Women Finish Rich, by David Bach
-any Suzy Orman books

Admin

Amy 04.08.2012. 04:34

How do I get out of credit card debt? I'm in over my head with credit card debt, can I get some advice as in what I should do?

Amy

Admin 04.08.2012. 04:34

By asking the question you have taken your first step to getting out of credit card debt. However, it will take planning, perseverance and resolve to solve your problem.

Since you don't give any specific details regarding your credit card debt or your financial situation, I can only give you some general suggestions and directions to take.

Here is my suggested plan:
1. Make a financial snap shop of your situation, including your income, expenses, debts and assets.
2. Start keeping a budget. For more help see BIlls.com personal budget guide at http://www.bills.com/guide/ .
3. Learn about your debt relief options by reading BIlls.com debt relief article at http://www.bills.com/debt-relief/ .

In brief, here are some of the basic debt relief solutions:
1. Maximize your payment schedule: Organize your budget and maximum your payment schedules by making fixed payments. Avoid maxing out on your cards and making minimum payments. (See Bills.com minimum payment calculator at http://bills.com/minimum-payment-calculator/
2. Loan Consolidation: If you have good credit then you might qualify for an unsecured personal loan at lower rates to pay off your credit card debt. Or, if you have a home with equity, then you can consider a cash out refinance loan. (There are negatives to transferring short term unsecured debt to a long term mortgage loan secured by your home).
3. Credit Counseling: A credit counseling service will help you organize your budget and evaluate if you will benefit from a DMP (debt management plan) that negotiates your credit card fees and rates and sets up a consolidated payment plan, that pays off 100% of your signed up debt over a 4-5 year period.
4. Debt Settlement: If you are struggling to make your payments, are willing to harm your credit score (if you don't make payments on time it is hurt already) then a debt settlement plan can help you negotiate a settlement whereby you pay off your debt over a 3 year period. Make sure that you do not pay upfront fees!
5. Bankruptcy: If you are in a hardship, then speak to a bankruptcy lawyer to see if you qualify for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, which is basically a court supervised payment plan.

Finally, I suggest that you try an innovative and cool tool, Bills.com Debt Coach (https://debtcoach.bills.com/ ) to help you find the right debt relief solution based on your personal financial solution.

Admin

Clarissa 29.08.2007. 17:44

How come debt consolidators can "negotiate" lower rates but I can't? I read that you should try to negotiate lower interest rates with credit card companies but when I tried, they basically said bite me. So the next thought was researching debt consolidation services but those look a bit sketchy.

I read that those debt places can "negotiate" the rate down to 9% but my question is how? If they are basically buying my loan from me, what makes the credit card companies NOT say 'bite me' to them like they did to me? And I also heard that the debt consolidation ruins your credit too....and help is appreciated.

Clarissa

Admin 29.08.2007. 17:44

Generally money is delegate active. When you are a customer,
the truth is some people give you a fare price. Some locations
especially in high cost items like homes, autos, and furnishings
are union teamed investor clubs. They use far too many plan b
for themselves add ons. This is truly the case in money loaners.
The collection for bank like business is severe, paid in labor
and what you see is police their property. Some do work. Not
many are healthy minded about fareness, health, food, or safety.
The overlords of all this authority is rare, yet they use force. What your not hearing about is what is a local bad money site.
The public image of banking has to be good, it is important.
As an indiviual you need be active in money management teams
like Red Cross, education, prayerful churches, book clubs to have fresh ideas. Please do not equate television with intelligence.
These tools of mass management mean to be helpful, they may
be scientically chose voices that even make some people shop!
Keep in mind that your intelligent life is supportable with the
continuing choice to belong to fare minded action. Here is a
good idea, keep in mind that until 2009 all the bills are actually
paid by the world's 2 richest people, paid ahead for you. This
positive planning is what they hope will guide you into a solid
process team.

Admin

Celeste 27.04.2012. 18:18

What to Know About Debt Solution Companies? When you find yourself in financial hot water, it can be challenging to know how to get out of it. From credit card debt to falling behind on major bills -- such as mortgage or student loan payments -- you may have no clue how to crawl down from your mountain of debt. Debt solutions companies offer consumers financial advice on how to deal with these types of issues; however, depending on the company, write answers please thanks

Celeste

Admin 27.04.2012. 18:18

Today?s marketplace is flooded with businesses, but we all know each business is not created equally. With a lot of people finding themselves in financial troubles and looking for ways to save money and consolidate their debt, we have seen an influx of debt consolidating loan companies available today. The tricky part is trying to figure out what consolidating loan company to chose to do business with and how to know if they are reputable or not. Below we have compiled a list of both, well respected, and some not so respected loan consolidating companies to try and help guide you to the right fit for you and what you are looking for. Please note, we are not rating these companies based upon personal use, but on the basis of other customers feedback as well as on what companies have been sued and in other legal trouble. Please check into whatever loan consolidating company you are considering doing business with for yourself and ask them questions as well as research their history. You can never be too safe when it comes to your money and financial future.

It is important to note there are a lot of loan consolidation companies out there today and like with any other business, there are some good and some poor companies you could choose from. Below is a list of both the reputable and non ? reputable companies which are available today.

Reputable Consolidation Companies:

Below is a list of some of the debt relief companies who are available to help with your debt and consolidation, as well as some of the most reputable debt settlement law firms who are available to offer their quality service to get you on your way to becoming debt free. The below consolidation and settlement companies are shown as reputable based on their customer feedback as well as their accreditation?s.

Loan Approval Direct
Debt Harmony
Oak View Law Group
DebtConsolidation.com
Premier Debt Help
Debt Point
Wells Fargo Private Consolidation Loan
Churchill Debt Settlement
DebtSWAT
Settlement Max
Mission Agency
American Debt Resolutions
US Debt Resolve

NON ? Reputable Consolidation Companies:

The following companies have recently been sued or in the news for other poor business relations and decisions. If you are considering doing business with one of these companies, or already are doing business with one of these companies, you may wish to further investigate them and look into how reputable they really are.

A New Horizon Credit Counseling Services
A1 Debt Consolidation
American Debt Consolidation
BudgetPlanners.net
Cambridge Credit Counseling Corp.
Credit Advisors
Credit Solutions
DebtConsolidation.com
Debt Busters
Debt Free America
Debt Free Today
Delray Credit Counseling
DTS Financial

Good luck!

Admin

corissa c 05.06.2008. 03:33

What should I do if I have more then one payday loan and I cant pay? what will they do? I dont wanna go to jail! Can they come to my job and home?

corissa c

Admin 05.06.2008. 03:33

You have to take a debt consolidation loan and pay off the payday loan as fast as possible. You know that PD loans have a highest interest rate of 400% and if you late the interest will accumulate and ruin you. Getting bad credit consolidation loan is very easy. There are many lenders who give loan for bad credit.
I hope http://loan-guides.net will help you in getting a bad credit consolidation loan.

Admin

resto_us 01.07.2008. 16:33

Does a credit counselor convince individuals that their service os good? My boyfriend and I were discussing the purpose of credit counselors. My boyfriend says that they only suggest things to you and its your choice to make, which I agree with. I dont think that credit counselors are bad, but I think that their job is based on convincing individuals that their service is beneficial. Do you think that convincing is part of a credit counselors job?

resto_us

Admin 01.07.2008. 16:33

Here is the problem.

By definition a "credit counselor" is supposed to advise and educate you on your credit problems. When you go to someone advertising themselves as a "credit counselor" that is what they should do.

Unfortunately these people are employed by companies suck as bankruptcy attorneys, consolidation loan companies, credit repair and credit debt settlement companies. Each of them will naturally guide to the services their "employer" supplies. They are obviously biased and will guide to services that are not the best for your situation.

So your counselor may suggest you file bankruptcy, when in fact you could probably get by with a consolidation loan and some "real" credit counseling to educate you on budget management.

Or they may talk you into debt settlement, when it's obviously you are so deep in trouble that only bankruptcy will fix it.

Some day the states will pass laws that will isolate credit counselors to do this...but for now let the consumer beware. Look around for non-profit debt counseling agencies.

Admin

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