How to Find Low Interest Debt Consolidation Loans
Low interest debt consolidation loans are the perfect answer if you are drowning in debt and feeling as though you are in a never ending pit. These loans can provide relief from the rising cost of living while helping to improve your overall financial situation. By consolidating your debt into one loan you will be able to pay off all your debts with one low interest payment. Many people feel that paying off their debts with a loan is unnecessary, that there is no need for them to get another loan to pay off the old ones. This logic is flawed; and if this is your thinking, then you have every right to be wrong.
Debt consolidation is actually a very good way to manage your debt. By combining all of your high interest rate debts into a single, more affordable monthly payment you will be able to save hundreds each month in finance charges. The secret is not mystical, it’s easy math. Credit cards often carry very high interest rates as much as twenty percent in some cases; on the order of ten thousand dollars or more.
By consolidating your debts into a low interest consolidation loan you will be able to make only one low monthly payment. In many cases this will be just one-third of what you were paying each month on all your high interest credit cards. The end result is you will be able to pay off all your high interest debts without a single monthly payment. This will also free up a considerable amount of money in your budget each month as well. This is because by paying off these loans you are freeing up the credit card companies to offer you lower monthly payments and lower interest rates.
It is important to remember that these consolidation loans are a tool. They are not miracle workers. You will still need to make sure you have made the extra effort to keep your debt down to a manageable level. While these consolidation loans may help ease the pressure of making your monthly payments, if you don’t make sure you don’t end up paying more in the long run, then this type of debt relief may not be worth your while.
Another option for consolidating debt is to transfer balances between credit cards or other debt accounts. With a consolidation loan you will want to transfer balances between accounts. This is best done by transferring balances that you are paying low interest on to a low interest consolidation card, such as a Bluebird card offered by American Express, or a Discover card. Transferring balances between credit cards is an option many people don’t often consider; it can help you lower your monthly expenses while still lowering your overall debt balance
One last option to consider is to shop around. If you are having trouble with paying your minimums on your credit cards, for example, then shop around and check out offers from other banks and lenders. You can get a low interest debt consolidation loan from a number of lenders that offer these types of loans. However, before you apply, be sure and read through the terms of the loan. Many lenders will charge quite a bit of fees for their services. In addition, they may require you to provide them with a copy of your credit report, which may further increase the cost of the loan.
If you have good credit, you may also qualify for low interest rate unsecured loans, which are easy to obtain. These types of loans do not require you to provide any collateral, so there is no need to worry about losing your home or other belongings in the case of a default on the loan. They are especially helpful for those who don’t want to have to worry about extra payments on their existing credit cards or loans.
Finding the best debt consolidation option for you depends on how much debt you have, your preference in terms of the company you choose, your ability to make on-time monthly payments, and the introductory or short-term rate offered by your lender. It is a good idea to check online for the current offers from various lenders. When you use an introductory offer period, you will pay less each month until the full amount is repaid, in most cases, a longer six-month term versus a shorter twelve-month term for most standard debt consolidation loans.