Finding The Right Debt Consolidation Loan For You

If you are trying to recover from your payday loan debts

, you may want to find a debt consolidation lender to help you out of your financial crisis. Be careful when searching the internet for a lender, since there are many fraudulent lenders out there who are willing to take your money and leave you with your debt load.

Before you sign up for a debt consolidation loan, check out these steps to help you find a reputable lender.

1. Do your own research on lending companies that offer loan consolidation services. Check online and through family, friends, or local ads. Review the loan companys interest rates, fees and loan terms.

2. Find out what the risks of a debt consolidation loan would be. These types of loans use collateral, usually your house or other property, to guarantee the loan because the lending company wants assurance that the loan will be paid back on time. Since the lender is borrowing you a substantial amount of money, make sure that you can make each monthly payment on time to avoid forfeiting your property.

3. Negotiate a better deal. A lender will not just give you low interest rates on your consolidation loan; you will have to negotiate the terms of the loan to get a better deal. Ask the loan lender to lower the rates and give you better terms if you have good credit.

4. Look over the terms and conditions of the loan. Read the loan contract word for word. If you dont understand something in the contract, make sure you ask a credit counselor what the terms and conditions of repaying the loan are.

5. Evaluate your credit report before you sign up for a debt consolidation loan. To see if you qualify for a consolidation loan, order a copy of your credit report from each of the three credit reporting agencies, Experian, Equifax, and Trans Union.

Sometimes a borrower can have a low credit score due to wrong credit information. Checking your credit reports before you apply for a loan can keep you from being surprised if you do not receive a loan due to a bad credit rating. If you find any wrong information in the credit report, you can contact the issuing credit bureau and dispute the information and ask them to fix the erroneous information. A good credit rating will give you a good interest rate from your lender.

6. Create a plan to repay the payday loan. You should know how you are going to keep up with the monthly loan payments before you ever apply for a loan. A loan should help you get out of debt, not put you even further in debt if you cant make your payments.

by: Marlon Jackson

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