Getting the Best Rates on Consolidation Loans

Consolidation loans can help you get out of financial distress by lowering your overall debt due to reduced interest rates. Having all or most of your debts under one loan can also help by making it easier to pay each month.

How to Get the Best Interest Rate on a Consolidation Loan

Everyone talks about where to get good interest rates, but many debtors feel stuck and do not know how to handle this process. Unless you have dealt with refinancing in the past, you are likely in the dark about this process. To make matters worse, loan paperwork is often confusing and laden with terminology that most people cannot grasp. Getting the best interest rate for your consolidation loan will depend on a number of factors including your credit worthiness, your credit score, your assets and obligations and your monthly income.

If you are seeking a consolidation loan, here are some tips for getting the best interest rate possible given your credit situation:

Consider whether you have anything you can use as collateral. If you can get a loan on your home or vehicle, the interest rate is likely to be lower than if your loan is unsecured. While it may be scary to use your property as collateral, it can help keep your bills down each month and for the life of your loan by providing you with a lower interest rate.
Sign up for automatic withdrawal. If you pay your monthly payment through automatic withdrawal, many creditors will reduce your interest rate by one half point to a full point. That may not sound like much, but even one interest point can make a big difference over the life of a loan.
Shop around. Sometimes credit unions offer special, low interest rate consolidation loans based on certain circumstances. Find out who has the lowest interest rate consolidation loans, and apply there first.
Be careful about applying for multiple consolidation loans though because credit inquiries show up on your credit report, and too many of them can significantly lower your credit score.

Getting Legal Help

If you need debt settlement advice or help consolidating your debts, an attorney can provide you with helpful advice on how to handle discussions with creditors. Dealing with debt and credit is difficult for a lot of people. An attorney can make the process easier by doing the hard work for you and demystifying your situation.

Need Debt Help?