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Where and How to Get a Debt Consolidation Loan

No one likes being in debt. What’s worse, sometimes it seems impossible to make any progress on your debt. However, many people have found that debt consolidation loans are one of the best ways to get out of debt quickly.

This article will help you get out of debt in two ways. First, it will help you understand how to get debt consolidation loans. Second, it will help you understand where to get a debt consolidation loan. Also, we understand that it’s especially hard to get a consolidation loan when you have bad credit. That’s why we’ll cover how and where to get a debt consolidation loan if your credit isn’t great. Use this guide to find the best place to get a loan to consolidate debt.

Debt Consolidation Loans in Brief

Before we talk about how and where to get a debt consolidation loan, it’s important to understand what a debt consolidation loan is and how it can help you get out of debt.

One of the biggest barriers to getting out of debt is high interest rates. Interest is the money a lender charges to give you a loan or line of credit. Unfortunately, some of the most common causes of debt, like credit cards, also carry the highest interest rates hence why people like to consolidate credit card debt with lower interest.

A debt consolidation loan is another loan you take out. You use the loan to pay off your existing debts. This consolidates your debts into one place. The consolidation loan will have a lower average interest rate than your current debt. It can also extend the term of your debt. That means you have more time to pay the loan back. It also lowers the amount you pay each month.

As you can see, debt consolidation loans are a vital tool to get out of debt quickly. It means that more of your money goes to paying down debt, and less goes toward paying interest rates. That means you’ll see your balance go down much more quickly. Remember though, there are plenty of other ways to pay off debt.

Where and How to Get a Debt Consolidation LoanHow to Get a Debt Consolidation Loan

The first thing you need to understand to get out of debt is how to get a debt consolidation loan. Thankfully, this process can be pretty easy.

The first thing you should do is make a list of the debt you’d like to consolidate. Once you’ve done that, you need to add up the balances to determine the total debt you’d like to consolidate.

This figure will tell you how much you need to ask for when you apply for a debt consolidation loan. Next, you need to shop around for the best loan provider. There are all kinds of places you can get a consolidation loan. We recommend our helpful tool that will match you with the best place to get a debt consolidation loan.

Next, you should compare the terms you’re offered. Remember, the goal of a consolidation loan is to reduce the overall amount of money you’ll spend on the loan. That means you need to pay attention to the interest rates and fees the different service providers offer.

One easy way to compare different loan options is to look at the APR. This number is influenced by the interest rate, but it’s much more than that. It takes different fees and costs into account. That means a loan with a higher interest rate, but a lower APR, will be cheaper than a loan with a lower interest rate and higher APR.

Once you’ve determined how much debt you want to consolidate, and what your options are, you need to apply for the loan. The loan application will ask questions about your debt and your income. It will also ask permission to run a credit check.

The lender uses this information to determine if you qualify for a loan. They will also use it to determine what kind of interest rates and fees they will offer you on the loan. Remember there are debt consolidation lenders for bad credit situations.

Following these steps will start you off on the path to getting the debt consolidation loan you need to get your financials back on track.

Understanding Credit Checks

Its important to pay attention to the credit check. Many services will run a soft check on your credit before offering you a loan. This soft check doesn’t show up on your credit report. That’s important because credit checks lower your credit score. This happens because looking for credit is a sign that you’re a slightly higher risk for default than you were before you searched for credit.

However, there is some good news. Specifically, credit reporting agencies treat multiple credit checks for the same type of product as one check. That means you can shop around to find the best rate without destroying your credit with multiple credit checks. But you need to know what kind of credit pull the applications you fill out will use so you can responsibly monitor your credit.

Where to Get Debt Consolidation Loan

Now that you know how to get a debt consolidation loan, you need to know where to get one. There’s no one answer that works best for everyone. Different lenders specialize in different types of customers. Our handy tool can help you locate a debt consolidation loan that works for you.

There are two options that we recommend for most people. The first is guidetolenders. This site has several benefits. First, it offers free online debt consolidation assessment. That means you can get a better idea of what your options are. It also gives you a better idea of the current challenge you face.

Even better, the process for guide to lenders is fast and easy. It doesn’t take much time to process. You can get a loan for as much as $40,000 in as little as 24 hours.

The other option is National Debt Relief. This company offers more than just debt consolidation loans. They also offer debt settlement services and more. They don’t have any advanced fees. They also don’t charge any fees upfront. Instead, you pay a percentage of the money you save by using their services. Best of all, there’s no commitment. Also read: Is Freedom Debt Relief legit?

There are other options as well. Advances in internet technology have caused a revolution in the lending industry. This has caused an increase in alternative lending options. Some of these lending options help connect people to non-traditional lenders. These lenders look at more than your income and your credit score.

New online lenders are usually made up of a collection of investors. People invest money in the service and give guidelines about what kind of risks they’re willing to take. The lender uses that money to form different pools of money it can lend from. The lender then uses state of the art algorithms to match borrowers to a pool of money.

These services have several advantages over traditional brick-and-mortar lenders. First, they don’t have as much overhead. They don’t need to pay to operate lots of physical branches. They also don’t need to hire as many workers and staff. Also, since they don’t have buildings to maintain, they don’t have to pay for things like rent, property, or utility bills.

As a result, these lenders are able to charge a lower interest rate and still make a profit. That means you’re more likely to get a better interest rate than if you applied to a traditional brick-and-mortar lender.

Where and How to Get a Debt Consolidation LoanHow to Get a Debt Consolidation Loan with Bad Credit

It can be hard to recover financially when you have bad credit. After all, when you have bad credit, you can’t get good interest rates on loans. That means you’ll pay more for financial services than other people. This can lock you into a cycle of debt.

There are a few ways to get debt consolidation loans bad credit options. The first step you can take is to use credit repair techniques to improve your credit score. Not only will this make it more likely that you’ll get approved for a loan, but it will also improve the interest rates you’re offered.

Second, you can focus on making consistent on-time payments for your current loans. This will show lenders that you are more trustworthy than your credit score shows.

Another method to get a bill consolidation loan with bad credit is to offer some kind of collateral. Collateral is property or assets that the lender can seize if you don’t repay the loan. This decreases the risk the lender faces. As a result, they’re more likely to approve your loan application.

Collateral can come in lots of different forms. Lenders will take stocks, property, or cash as collateral. They may be willing to accept other items of value as collateral, but you’ll need to check with specific lenders.

Where to Get a Debt Consolidation Loan with Bad Credit

The next challenge is understanding where to get a consolidation loan when you have bad credit. Many people wonder “Can you get a consolidation loan with bad credit?”  If you have bad credit, then your options are going to be more limited. But that doesn’t mean you can’t find a debt consolidation loan if you have poor credit.

Innovative Lenders

The internet has created a whole new way to get debt consolidation loans. There are lots of sites and options for people with poor credit now. Many of these lenders specifically focus on helping people with poor credit get out of debt faster.

Some of the best options are sites that connect investors with borrowers. The site collects money from investors and then uses that money to disburse loans. The investor makes a profit when the borrower pays the loan back.

These lenders look at more than just a credit score when making decisions about loan approval. Some examples include SoFi, Lending Club, and Avant debt consolidation.

As a result, you can find a loan that works with your credit. You may not get the best interest rates with poor credit, but a consolidation loan at a lower interest rate is better than continuing to pay a higher interest rate on your current debt.

Local Banks and Credit Unions

The next place you can look for a consolidation loan to get out of debt is your local bank or credit union. Many banks and credit unions have special programs for people that are customers of that bank. This often comes with a built-in interest rate reduction. That means you’ll be able to save even more money. 

Local options are best if you need to explain why you’re qualified for a loan. Many online lenders don’t leave a lot of room on their standard applications for you to give details about how you’ll pay the loan back. This can be the best personal loans for debt consolidation.

However, local bank branches and credit unions will use a face-to-face system. That mean you can explain to the loan officer what your situation is. You can explain why you got into debt and how you’ll be able to get out of debt if they give you a loan. This human element can make a huge difference for a lot of borrowers.

Credit unions can be an even better bet for some borrowers. After all, credit unions are organized to serve their local community and local community members. That means that they may have lower qualification requirements for loans to consolidate debt.

However, there are some drawbacks to these options. First, banks, both large and small, have a lot of overhead. They need to pay for buildings, staff, and their own fees. That means they might be more risk-adverse than some of the non-traditional lending options. It also means that they need to make money to turn a profit. Because of the size of the organization, it takes higher interest rates to cover their costs. This means you may get better interest rates online. In fact that's where you'll find the lowest interest rate debt consolidation loans.

Credit unions have a different set of problems. These institutions are generally smaller than banks. They also don’t have the same network of investors or access to capital as online lenders. As a result, they simply might not be able to afford to take a risk on your consolidation loan.

Dan Steadman

Dan Steadman

Financial Advisor, MoneyBeagle

Dan is one of the top financial experts when it comes to debt consolidation. With more than 20 years of experience helping people tackle debt, he has a unique insight when it comes to solving debt-related problems. 

Dan got his start when he went to work for a bank after getting his Business Degree. He worked his way up and became a loan officer. This position gave him unique insights into the ways that financial products work and how people can utilize different financial products to improve their lives. He’s seen hundreds of success stories and just as many failures – so he knows what steps are most likely to help his readers.

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