subject: Find the Best Consolidation Loan by:Paul Rogers [print this page] To find the best consolidation loan, you will want to think about the reasons you need to consolidate your loans. Are you interested in making life easier by eliminating multiple payments in place of one single payment, or is your need a little more dire, in that you simply cannot afford to pay the debt that you have now and see consolidation as the only way short of filing bankruptcy to reduce a high interest rate or lower your monthly payment amount?
If your goal is simply to make life easier, you may have no problem accepting the first consolidation offer that you get. If on the other hand your financial future rests on whether you can obtain a consolidation loan quickly and with an acceptable interest rate, you will want to choose carefully.
Not seeing the forest for the trees
There are so many online lending companies out there that it may be difficult for you to sift through them all to find legitimate opportunities. While a well-known company with a primarily bricks and mortar presence may offer the reputation that you desire, they may also have higher interest rates than a smaller, strictly on-line lending company. Online lending companies are more flexible with their loan rates, and will usually go out of their way to work with all types of people, including those who have notoriously bad credit. But you will need to do your research before choosing a lending company online, due to the proliferation of online scams and the ease of forming a company. Once you have picked a few good candidates, check with the county office that serves that particular business. They will usually have a file on each of the companies registered in their area, including how many complaints they have unresolved. You will want to read their policies carefully, as well as the fine print attached to any documents. Some lending companies will look good until you find out that they charge a fee to go along with that great loan offer.
The best loan for you
Once you have chosen to work with a particular lending company, you will then have to consider what type of loan to apply for, whether a secured or unsecured. If you have good credit, an unsecured loan may offer the best repayment terms, although the interest rate may be a bit higher than its complement, the secured loan. A secured loan is meant for those who are willing to place a piece of their property up as a guarantee that the loan will be repaid. Should you miss too many payments with a secured loan, you run the risk of losing your collateral, whether it be an automobile or your home. Most legitimate online lending companies will have a disclaimer at the bottom of their web-page warning you of the risk inherent in placing your home up as collateral.
If you fear taking out a secured loan, but don't want the higher interest rates of an unsecured loan, and you have good enough credit to afford a credit card, you can pay off your debt with the card, effectively placing all of your debt in one place, which ideally offers a lower interest rate than the many balances put together had been. However, this will only work if you intend to pay more than the minimum required per month, with the final goal of paying the debt off quickly.
