How To Find The Best Debt Consolidation Loans

What are consolidation loans?

A debt consolidation loan offers a means of paying your debts off through a single manageable monthly payment instead of having to pay off many different debts every month using several different payments.

The basic principle behind debt consolidation loans quotes are to help you in clearing your most expensive debts before any extra charges or interest are incurred.

Usually, they can be used to clear multiple credit cards, overdrafts and loans and move them to a single loan using a single provider.

It can certainly prove to be a useful tool, especially you find a low interest debt consolidation loan, if you need to cut the rate you need to pay and the number of monthly payments you need to deal with.

What about the loan term?

When consolidating a loan, you'll need to determine the amount you'd like to borrow and the term over which you'd like payments to be made. You can minimise the amount payable in overall interest, by keeping the borrowing period as low as possible.

By spreading consolidation loan repayments over a much longer term compared to the time period for your debts currently, then clearing your balance may well cost you more in the longer run.

Main benefits of Unsecured consolidation loans

In general, unsecured consolidation loans will be preferable as they don't require any form of security for the lender, like your home to guarantee you'll meet your repayments. They are also much more widely available because you can apply even if you do not have a property to your name.

Any alternatives for unsecured loans?

But, remember that if you do have a fair to reasonable credit score it's well worth thinking about 0% balance transfer credit cards which may provide a much more flexible and a cheaper solution.

The good thing is these methods allow you to repay your loans when you have money available and, apart from an approx. 2-3% balance transfer fee, you will not be charged any interest for a pre-determined number of months.

Of course, You will need to be pretty confident you can either repay your debt in full by the end of the zero percent balance transfer offer or face having to make another balance transfer for this to remain a working option for you.

If you don't do this, you may end up paying out a significant chunk of change in interest repayments. Some find that the key problem is getting into debt is simply a vicious circle that they get stuck into. That is, the more debt they get in, the harder will be to obtain a loan for paying off their debt.

But, debt consolidation loans quote for bad credit are not always a limiting factor as you will still be able to borrow using this channel.

Guarantor debt consolidation loans

Guarantor debt consolidation loans and secured debt consolidation loans are other potential options if you are not eligible for an unsecured debt consolidation loans quote. But, the downside is your home would be placed at risk if you cannot maintain your repayments.

Debt consolidation loans could be a useful way if you need to merge many large and costly debts into one single more affordable loan. But, this will only be the case if you compare all of your options and only select the loan which works out cheapest for your own individual circumstances.

If you're not able to keep up with your current debt repayments and need help or advice then getting professional advice from a charity or not-for-profit organisation offering support and guidance for individuals who have debt struggles is likely to be a suitable option.

In summary

There are plenty to choose from when it comes to applying for an unsecured debt consolidation loan and perhaps the best way you can analyse your options is by comparing the different options, each with their own benefits and their policies, terms and conditions.

Being stuck in debt may seem to be a difficult situation to be in, whether it's a debt caused by your own poor choices or otherwise. If you really are struggling with debt repayments, then you may consider taking out a debt consolidation loan. to find out about the best course of action for you, contact us today.