subject: Clear Your Doubts On Debt Consolidation [print this page] Most of the people have so many doubts popping up in their minds when they want to go for a debt consolidation. They get bothered with so many questions storming their mind.
Many common questions, which baffle the people on the thought of debit consolidation, are answered here.
What is the process of Debt Consolidation?
There is a simple rule to be followed for transferring your loans from other debtors. All loans are aggregated into a single loan and then the repayment installments are reduced. It may look a bit tedious, but it is important. The debt consolidator follows a method of debit consolidation to cut down your total debt.
Will the interest rate depend on the present loans?
The interest rate applicable is determined based on many facts such as your credit rating, the type of your loan, the loan amount you have to pay back, transfer of balance loans and your current bank balances. It is observed in many cases; the people opting for debt consolidations have a bad track record of credit rating. This itself influences the debt consolidator to apply a higher rate of interest.
How can you qualify for getting a debt consolidation loan?
If you have a number of loans, you should apply for the debt integration at the earliest. However, it is important to know that in case you have a very bad credit history, your application is liable to be dismissed. Besides, the secured loans cannot be consolidated. The secured loans are not permitted to be included in the debt consolidation.
Are All Loan Consolidations Different?
Yes, all the debt consolidation loans are different. The debt consolidator will advise you and then integrate all the loans into a single loan. In case not all the loans are aggregated together, you do not get a benefit of the debt consolidation with a lower rate of interest.
How is the repayment period determined?
Majority of the debit consolidators will increase the period of repayment to reduce installment. This is not in your favor, as it will put you to a loss, and you will be charged interest for a longer time. Ultimately, you will have to pay more money. You should assert on consolidator to fix lower payments and at the same time a shorter period for the payoff. This way, you can earn the benefit of paying reduced amount of loan.
Can You Have the option to choose a Debt Consolidator?
You have the choice for debt consolidations with private operators also. They can give you advice on credit or debit consolidation. You can even contact the credit agencies to cut down your loan liabilities. However, it is most crucial to study the pros and cons of all offers and options before you make a commitment by signing up a deal.
Do all debt consolidators operate legally?
Yes, the debt consolidators are legitimate. Even so, as it happens in all the trades, there are some dishonest people. You can come across some debt consolidators who are not accredited. You should investigate and find the legitimate debt consolidator who is a registered member of Better Business Bureau.
Can one easily pay off the debt consolidated loans?
The debt consolidating process makes the paying of the loans easier. However, it is for you to manage your funds and properly plan to ensure the timely payments, else you may again land up in a financial mess.
