Friday, July 25, 2008

Debt Consolidation Loan - Getting the Best Rate

Finding the best possible rate in selecting a debt consolidation loan is improved by use of some simple tips and instructions for lowering negative forces on your loan.

Regardless of the type of loan that you apply for, you want to get the best rate, so that more of the proceeds of the loan can go toward the project you are considering. If you are applying for a debt consolidation loan, the same is true. The less you pay for interest, the more money that you will see going against the loan principle. If you must pay higher closing costs and fees, the loan may end up costing you more than it would have cost to repay the original debts. Here are some tips to make sure that you get the best overall cost for your loan.

Take out the smallest possible loan

If your true goal is to pay off existing debts in order to have more cash available for future wants and desires, then you should resist the desire to pad the debt consolidation loan with other items. Thinking that you will buy some items just before taking out the loan, because otherwise you may not be able to get them is the same type of thinking that often leads to credit cards being maxed out in the first place. Pare your debts to the bone and you will pay less to get them paid off, even if you don't get a consolidation loan.

Clean up your credit report

Before applying for a debt consolidation loan, you should obtain a copy of your credit report from each of the three major credit reporting agencies. Then, review each report for inaccuracies and insist on them being corrected by the credit bureau. Eliminate wrong addresses, employers or any other items that can be used against you. A credit report that makes it appear that you are a poor credit risk can prevent you from getting a new loan, or can make the cost of obtaining such a loan higher. Follow the tips and procedures that are outlined online for correcting inaccurate entries. It is unnecessary to pay a credit repair organization or person to do this work for you.

Shop for rates and terms

The interest rate is the amount you will be charged for the use of the money you are borrowing. The term is the length of time in which you are obligated to pay off the money you borrowed. Even when you don't use the internet, you will find significant differences between the rates and terms charged by two different local lenders. This is even truer when you obtain a loan through internet sources. The competition is intense and you can often find a loan that will provide you with a lower cost to accomplish your goal of a debt consolidation loan that will lead to a quick payoff.

Watch out for hidden costs

Even the most reputable lenders will sometimes insert charges or fees on your loan that are unneeded. You must be aware of such charges and simply insist that they be removed before signing the contract obligating yourself to repay. It is important that you review and question each item that you don't understand and make a determination based on full disclosure.

Finding ways to get the best rate on your Debt Consolidation Loan or Debt Consolidation is easy when you visit a website dedicated to loan and mortgage information and services located on the internet at

Thursday, July 17, 2008

Debt Consolidation Loan - Advantages and Disadvantages

A debt consolidation loan can be a benefit to the borrower or can create further problems. Used correctly, it can relieve stress and reduce record keeping.

People elect to take out a debt consolidation loan for many reasons. These should be carefully reviewed to determine if this financial choice is right for your situation. If you just want to be able to increase your credit availability, a debt consolidation loan is not a good way to go. A good procedure is to make a list of all the outstanding debts and the interest rates that apply to each one. Calculate how long it would take before the debts could be cleared using the existing minimum balances and terms. Compare that with the cost of a loan to clear the smaller amounts or to roll them into a larger loan.

One monthly payment to keep track of

When you select a debt consolidation loan, you have a better chance of ending the process with just one payment to make each month. You can usually structure the due date on the payment to take advantage of the pay dates in your household. It may even be possible to arrange for an electronic withdrawal from an account that you can manage online. In this way, you can transfer funds into the account just prior to the due date so that you will never be in danger of missing a payment or incurring overdraft fees.

Lower Interest rates

If you shop carefully for a debt consolidation loan, you may be able to get a loan that has a lower interest rate on the loan. This is not always possible, because credit card debt, for example tends to be very high interest and the consolidation loan may not gain much in the area of interest, particularly when there are often loan origination fees and closing costs on the loan. Make certain to carefully review the loan document so that you know exactly what you are agreeing to.

Tax benefits

If your debt consolidation loan is tied to the equity in your home, you may be able to gain tax benefits from the interest on the loan. Since this type of loan features interest rates that are typically lower than those of credit card debt, you can make a double savings. However, you should keep in mind that although the interest rate is lower, it may take longer to pay off the debt so your loan can actually end up costing you more. Again, the decision will depend on your particular situation.

Stress reduction

Probably the most commonly reported benefit after obtaining a debt consolidation loan is that of being able to reduce worry about how the bills are going to be paid. When you are faced with many minimum payments on numerous credit card bills, it can seem as if you will never be able to get ahead. When you have only one structured payment of a set amount, you can plan ahead, you know it will fit within your current budget so you no longer need be frantic about the danger of being unable to meet all your financial obligations.

Gathering information about a Debt Consolidation Loan or Debt Consolidation is simple when you use the resources to be found at Here you will find accurate information in easy to understand format.