How to Get a Debt Consolidation Loan in 5 Steps


Debt consolidation is a strategy used to simplify your debt situation by combining multiple debts into one single loan.

It is possible to get a debt consolidation loan with poor credit, but you must follow certain steps to be successful. To get the best help when you apply for debt consolidation loan, you must do your research well. Do due diligence on lenders and be honest about your financial situation.

Start by finding the best debt consolidation loan company to partner with. To begin exploring options, it is advisable to use a free service company like Sfgate for guidance. Here, you will get help through the process of narrowing down your choices. To get it right, compare interest rates, fees, and terms of various companies.

Getting Started with Debt Consolidation

If you are someone who is drowning in debt, you are probably looking for a way to get out. If this is the case, then getting a debt consolidation loan could be the answer. The great thing about this type of loan is that it will combine all your debts into one manageable monthly payment. Here are 5 steps on how to get a debt consolidation loan in 5 steps.

  1. Make a list of your debts

The first thing you need to do is make a list of all your debt, from credit cards to student loans and everything in between. This list will become important later when you start calling creditors or financial institutions to negotiate down payments or interest rates for your new loan.

  • Decide on whether or not it makes sense to consolidate

Consolidation can be a great option to deal with accruing debts. However, there are some instances where it just does not make financial sense. For instance, if you have credit cards with high balances and lower interest rates than the loan you are getting, then consolidation may not help your situation much at all.

If you cannot make the minimum payments on your credit cards now, you will still be unable to make the minimum payments after consolidation. Therefore, this means you may end up in more debt than you were before consolidation.

  • Find out what your current interest rates are

If you know this information already, skip ahead; if not, here is how to find out from each credit card issuer:

  1. Call the number on the back of your credit cards and ask a representative to give you your interest rates. Some people do not like talking to ‘l collections reps. However, remember that this is YOUR money we’re talking about. Therefore, call and get those rates!
  • Visit the billing statements section of your online credit card account and get the current interest rates listed there.
  • Check to see if you can find a Debt Consolidation Loan at a lower rate

The lowest advertised rates are from Lending Club, which offers debt consolidation loans between 3.49% and 7.07%. It may not be wise to consolidate all of your debt at once, but it is probably a good idea to consolidate what you can.

  • Check with your local bank for more information on their loan programs

Get help from the local banks on the available loan programs. Also, try smaller banks that are not open to public investors, as they are often able to offer rates that are better than the big box banks.

Getting the best rates on your debt consolidation loan is possible by using all of the tools at your disposal. By making sure you can find a better rate than what you are currently paying, then consolidating all that high-interest debt into one low payment, it will be much easier to pay off in full.

Final Advice!

You can save a lot of money by consolidating your debt. However, you should choose the right debt consolidation company to use. The wrong choice could cost you thousands of dollars, so be sure to read into any offer carefully before signing on the dotted line. It is important to avoid falling into another trap with another moneymaking scheme. If you need any more advice on how to consolidate your debt, be sure to contact one of our friendly advisors today.