There are several options for cheap debt consolidation loans. The best
rates can be found with secured loans, like a home equity loan. But,
even personal loans can save you money on interest charges when you pay
high rates on credit cards and other unsecured debt.
Before you apply for a debt consolidation loan, check your credit
report for any errors. That way you wont end up paying higher rates than
necessary. Then start comparing lenders and their terms to get approved
for the cheapest loan.
1. Check Adjustable Rate Loan Terms
With an endless number of financing offers, it can seem a bit
overwhelming trying to find the cheapest debt consolidation loan. When looking
at financing, remember that you have to factor in closing costs and fees
besides just looking at rates.
So cashing out your home equity by refinancing your mortgage could be
more expensive than taking out a home equity loan. Unless you see a
significant drop in your mortgage rates, closing costs will eat up any
savings you see in refinancing your mortgage.
As a rule of thumb, adjustable rate loans usually have the lowest
starting rates. You can also take a look at introductory credit card offers.
Some offer low lifetime transfer rates.
2. Review Your Free Personal Credit Report
Before shopping for financing, peek at your credit report to be sure
that it is accurate. Any errors you find should be handled by the
reporting agency.
While you cant dramatically improve your credit score overnight,
consider spreading your debt over multiple accounts. A maxed account is a
negative. Also, limit the number of credit inquires you allow. Only let
the most promising lenders look at your credit report to formulate a
financing offer.
3. Compare Debt Consolidation Lenders and Their Offers
By far the easiest way to get approved for low rates is to request
quotes based on your credit score. Without giving permission for lenders to
access your credit report, you can get accurate quotes without
affecting your credit score.
While you are looking at lenders, look at the different types of
financing available. Special offers on rates may convince you to change your
mind on how to finance your debt consolidation.
Here are our
Recommended Debt Consolidation Companies Online.
Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.
