How to Get a Cheap Debt Consolidation Loan

There are many people who never thought they will ever need to solicit the services of a debt consolidation company. Nobody ever starts out to fail, especially with their finances. However, contrary to our expectations, we sometimes find out, to our own dissatisfaction that we are in debt. And not just a single debt but many different types: credit cards, personal loans, mortgages, auto loans and store card debts, to name but a few.

If you find yourself in a mess like what we have described above, one way of getting out of it and getting your financial life back to within your own control, is to use a debt consolidation company to help you out. In other words, you do get a debt consolidation loan. But what does that mean? It means that the company gives you a loan that will pay off all your existing loans, so that at the end of every month you make a single repayment amount instead of say 4 or 6 different payments, depending on the number of debts or loans you have.

Now, it is commonplace to find that people who use debt consolidation companies usually have similar financial characteristics:

(1) they have poor credit rating,

(2) different number of loans or credit card debts, and

(3) they are really stressed up most of the time.

Going to a debt consolidation company can be expensive as most of the time the loan they give you usually have high interest rates. To avoid this you can decide to get a cheap consolidation loan and here the top 5 tips on how to get a cheap debt consolidation loan to help eliminate your debt.

1. Turn to your family and friends and ask them for a loan. This is a difficult thing to do because money and friends and family do not go well together. But if you can do it then go for it. It has its own merits. You will most likely not be charged interest or it will be a flat rate if you are charged interest. Secondly, it will never appear on your credit report.

However, it is important to know that you do not destroy the relationship you have with your family member because of money. So have a solid plan in place to repay all of the loan as well as any interests you will be charged. Ensure you document everything in the initial stages of the loan acquisition, so that everyone knows exactly what their responsibilities are. This is one way of getting a cheap debt consolidation loans.

2. Next, take advantage of the many credit card offers available today. Open a new credit card account with a lower rate and do a balance transfer to the new card. If your current loan has an 18% rate and the new card is 6%, you will save thousands of dollars. Be sure never to default on the loan though.

3. Get in touch with the credit card company. Ask them for a rate reduction. Let them know you will take your business elsewhere if they do not give you a reduction. It certainly not be much. However, over the life of the loan you'll realize you've saved a lot of money.

4. If any of the above fail to get you the results you need, then research good debt consolidation loan companies to see if one of them will give you a loan. If for instance you had a student loan that has been outstanding for a long time, you can settle it this way.

5. Consider taking a home equity line of credit if you own a home and there is a considerable amount of equity in it. Home equity line of credit is usually 5-7 percent in interest rates. The other rather big advantage is that the interest on a home equity line of credit is tax deductible, so as you can see you can some of the money back.

If you follow these steps, you should be able to acquire a cheap debt consolidation loan that will save you lots of money in interests and also get you back on a good path to rebuilding your financial life. Good luck!

Source by Brandon Q Barr

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