Debt consolidation loans can be a great approach if you wish to take control of your finances. You can organise payments and possibly lower interest rates in just three simple steps. Debt consolidation loans are also able to lower your loan payments each month!

This is due to the fact that personal loans frequently have cheaper interest rates than credit cards, medical loans, and other types of debt, especially if you have high to exceptional credit. You won’t have to worry about the details of merging your other debts. Because a lot of lenders also offer direct payments to creditors of third parties.

Appropriate consolidation loans are personal loans that have low annual percentage rates (APRs) flexible repayment schedules. They don’t charge prepayment penalties, allowing you to pay off your debt early without incurring charges.

What is a debt consolidation loan?

Taking out a loan to repay other loans is called “loan consolidation”. So when a borrower consolidates their debts, they obtain a new loan. Typically with better conditions (a lower interest rate, lower monthly payment, or both). They can utilize the loan to settle their existing outstanding bills. Credit card debt, vehicle loans, and other personal debts are frequently paid off with debt consolidation loans.

This can lead to a more organised payment. You don’t have to pay your loans to six different lenders or waste time and energy… Debt consolidation loans open a door to simplicity and they can even make you pay less.

How does debt consolidation work?

Debt consolidation loans are extremely simple and straightforward!

All you do is apply for a personal loan from your bank or another lender to begin consolidating debt. Once your lender has granted you a debt consolidation loan, it might offer to automatically pay off your other debts. But you can also choose to accept the cash and settle them on your own terms.

The upside of debt consolidation loans is freedom. You have the option to give the lender your money so they can pay off your previous loans. Or you can take the responsibility and do it yourself.

This is a great feature that some other types of loans don’t have… One of those loans is the payday loan. The payday loan basically allows lenders or credit givers to take out your money at each payment day. They are one of the trickiest instalment loans out there.

 

Benefits 

You may be considering a debt consolidation loan if you have accumulated debt over the years… Through credit cards and loans in order to lower your total monthly obligations and relieve financial strain. However, there are reasons for and against doing this, therefore you need to be fully informed.

A debt consolidation loan is a simple method to pay off all of your debts, including personal loans and credit cards if you have them and wish to do so.

Debt consolidation benefits include:

• Reduce your monthly obligations to generate extra monthly spending money
• Instead of managing many loans, simplify your life by making just one payment.
• Instead of just paying the minimum each month, have a clear payback plan.
• Utilize the chance to reduce your spending and get back on track.
• Start rebuilding your credit score.

You get a new loan, ideally with a lower interest rate and a more convenient term, and use it to settle all of your existing debt. Then, with just one manageable payment due each month, you can see your finances more clearly. Perhaps you could regain control of them.

How to get debt consolidation loans?

The process to getting a debt consolidation loan varies from lender to lender. So we cannot exactly tell you how to get it.

But here are the general rules when it comes to applying for a debt consolidation loan…

The Step By Step Guide to getting a debt consolidation loan:

• Check your credit score

  – You can obtain a free credit score report from your credit card company or another website that provides such information. You will gain a better understanding of your eligibility and creditworthiness thanks to this. A score of 610 is preferred, but a score of at least 720 will result in favourable terms.

• Take action to raise your credit score if necessary

  – Take the effort to raise your score before applying if it is below 610 or you want to raise it to get favourable terms. Some ways to do this include reducing your use of credit or paying off past-due obligations.

• To what extent do you need to combine your debt

  – Calculate how much you would need to borrow to pay off all of your obligations after checking your credit score. However, keep in mind that you’ll receive your funds in one lump sum. You’ll be required to pay interest on the entire quantity, so only borrow what you actually need.

• Compare loans to find favourable conditions and interest rates

  – Before completing your application, many lenders will allow you to prequalify. This allows you to view the conditions you would receive with only a soft credit check. Without damaging your credit score.

• Formally apply for a loan and wait for a response

  – Apply online or in person after locating a lender who provides you the most favourable terms for your circumstances. This procedure can take a few hours to a few days, depending on the lender.

Following these steps will get you through the entire process of getting a debt consolidation loan, no matter the nuances.

What are debt consolidation loan alternatives?

We’re not saying these are better, or worse… These are alternatives that you can take if you don’t qualify for a proper debt consolidation loan. Be aware that they can do more harm than good! Here they are:

Cards for balance transfers – For a nominal cost, you can move—or transfer—your current credit card debt to a new card with a 0% introductory APR, according to several credit card issuers. You can avoid paying interest as long as you pay off your debt within the introductory term. Which is often up to 21 months. After the introductory period expires, interest will start to build up on any remaining amounts.

Mortgage equity loan – You could be able to borrow up to 85% of your equity if you have enough equity in your home, typically at least 15-20%. You will receive a lump sum payment along with interest that you can use to pay off high-interest obligations. Since home equity loans are backed by your house… The lender has the right to take possession of it if you fail to make payments.

Credit line for home equity (HELOC) – A HELOC provides you with access to money from your home equity in a manner similar to a home equity loan. Instead of getting money all at once, you’ll have access to a credit line that you can use. You can redraw from as you pay off your debt over the draw term. Additionally, you will not be required to pay interest on the total allowed amount, simply the amount you borrow.

These are your alternatives that you can take. Like we already said, please be careful taking them because they can often do more harm than good.

It doesn’t even matter what they are… Taking any type of loan should be a rational, responsible decision!

 

How to compare these kind of loans?

You can apply for a personal loan (debt consolidation loan) quickly and easily online. Whether it is through traditional banks, credit unions, and alternative lending platforms. You don’t have to go to a bank location. Many of these lenders also have flexible repayment options and affordable interest rates. So you might be able to save money by combining your existing obligations.

Whichever loan you want to take, comparing loans is the smartest decision you can make!

1. Prequalify if at all possible

   – Prospective borrowers can prequalify for a loan from a lot of personal loan providers. This entails that the applicant can provide information regarding their financial requirements, income, housing condition, and other pertinent factors… To learn what types of loans, interest rates, and payback terms they are likely to be eligible for. Better yet, this procedure often just necessitates a mild credit query… Allowing you to comparison shop without negatively affecting your credit score. The prequalification method helps simplify your search by eliminating lenders with higher rates. If you believe you might benefit from consolidating your debt but are unsure of what rates you’ll qualify for.

2. Think about why you’re taking a debt consolidation loan

   – Personal loans are only allowed to be used for certain activities… Such as consolidating consumer debt, home improvements, vacations, weddings, funerals, significant purchases, and other personal needs. Because of this… Lenders frequently prevent you from using personal loans for things like postsecondary education costs, company expenses, or even illegal activities. Always be certain that using the loan for debt consolidation is an acceptable use of the lender before choosing one. Determine whether the lender will pay your other creditors directly to make things even better.

3. Watch out for additional charges

   – Some lenders provide fee-free personal loans… Which exempt borrowers from paying origination fees, late payment penalties, prepayment fees, and other typical loan costs. When looking for favourable debt consolidation loan terms option… It’s critical to inquire about costs because this is more of an exception than a rule. This is crucial if you’re seeking to consolidate your debt in order to save money! Because throughout the course of the loan, fees may reduce your savings. Additionally, if a lender charges an origination fee… Confirm if it is included in the APR or deducted from the loan amount before funding. This could affect the loan amount you should ask for.

4. Analyse the available customer support choices from the lender

   – Before you sign the loan agreement with a lender… Who is willing to lend you the money you require on reasonable conditions, there is another thing to think about. Customer service might not seem important in the beginning of your loan… But it will be crucial if you have trouble making payments or get into financial difficulties later on. To make sure it’s a good fit, check out the lender’s customer service resources! Read testimonials from previous and present borrowers.

Congratulations! You now know how to compare loans and find a favourable loan for you. Unfortunately this process is extremely daunting and it can exhaust your mind in a matter of minutes.

Read the next section if you want to see a quicker, simpler alternative! It can get you your desired debt consolidation loan in a matter of minutes!

Like we said, comparing loans is the smartest thing you can do. Not only can it save thousands of pounds, but it can also be extremely quick and effortless. 

Don’t fall for the first loan you see, because the chances are that it is sub-optimal

Heck, sometimes it isn’t even good at all.

How is this possible? Well as you already know the internet is extremely powerful! We harnessed that insane power and directed it towards something positive – saving you money and preventing you from losing it.

LoanTube’s proven revolutionary methods bring you faourable loans from multiple UK lenders within our panel! You can pick which one is the perfect debt consolidation loan deal for you.  In just 3 steps, you can fill the form and get results in a minute.

LoanTube performs soft credit checks because we don’t want to harm your credit score. With us, the loan you see is the loan you get! there are no fancy, eye-catching numbers that waste your time and give you false hope.

So, if you wish to check your eligibility rates and find a good debt consolidation loan among our multiple partner lenders, click here and start comparing!

Remember that our service comes at no charge to you. You don’t have to accept any of the quotes we provide you with if you don’t like them.

PS: LoanTube has only the most reputable lenders, so you’re save when it comes to “Christmas loan” tricks