How To Get Low Interest Rates On Debt Settlement Loans

Debt settlement loans are loans that you take in order to settle debt with creditors. Most creditors will be willing to settle debt for less than what is owed, but only under certain circumstances. Typically, a creditor is most willing to settle debt with a person who is behind on his payments and who the creditor feels is in danger of bankruptcy. The creditor will also be most willing to settle debt with someone who can come up with a one-time lump sum cash payment, as opposed to with a person who wants to settle debt for less but who also wants to continue making his debt payments over time. Because of the nature of debt settlement, it can be difficult to get low interest rates on debt settlement loans, since your credit usually already has to be in some trouble in order for you to qualify to settle in the first place.

Tips for Getting Low Interest Rate Debt Settlement Loans

If you do want to settle your debt for less and you need a loan to do it, here are some tips that can help you get the lowest rate possible:

• Consider getting your debt settlement loan before you fall behind on your payments.

If you are just barely making your minimum payments right now, you may know that debt settlement is in your future- and this means you may have already been told that you need to stop paying on your debt so the creditors will be willing to settle. Apply for your debt settlement loan before you do this, so you can get the loan before those late payments show up on your credit. Keep the money and add to it the money you would have been making on your monthly credit card payments. This will all add up to a nice large sum of money you can offer to the creditors as a settlement for your debt.

• Look into tapping into your home equity

If you have equity in a home (which means your home is worth more than you owe) you may want to consider getting a home equity loan and using the proceeds to settle your debt. The interest rates on mortgage debt are usually considerably lower than on personal debt such as credit card debt and mortgage interest is also tax deductible, so there are several benefits of doing this. It is important to be very careful when doing this though- you are putting your house at risk by taking a home equity loan and if you can't make your payments, you could find yourself facing foreclosure.

Getting Help

If you are considering debt settlement or taking a debt settlement or consolidation loan,you should speak with an experienced debt settlement attorney as soon as possible. Your attorney can provide you with guidance on what your best options are for settling debt, getting loans or negotiating with your creditors to get the best deal possible.