Debt Consolidation Loan: Helps you Combining your Multiple Loans Into One
Written by admin on December 7th, 2010Debt consolidation refers to consolidation of oneâs multiple debts into one single debt. This enables the borrower to repay to just one creditor instead of several creditors, thus making the job a lot more convenient. Also, the rate of interest is greatly reduced and hence this is a viable option. It is considered extremely effective when dealing with several debts as well as a bad credit history.
The amount that can be borrowed with a debt consolidation loan varies from £5000 to £75000 or greater, depending on the equity of oneâs home. As can be guessed, a debt consolidation loan, which is usually secured, can even be of unsecured type with a higher rate of interest. The repayment term for a debt consolidation loan is 3 to 25 years, depending on the amount in question and the repayment capacity. To get the best debt consolidation loan, one needs to put in ample research. This research work is minimized if it is done online. Ready comparisons are available between different debt consolidation loan giving agencies and the process can be extremely convenient. All one needs to do is to fill out a form on the basis of which a credit score is calculated. This credit score determines the rate of interest that one might have to pay. The better the credit score, the better the interest rate.
The approval for a debt consolidation loan can take up to 12 to 15days. Once the value of the collateral is judged, the loan approval is swift.
Also, being secured loans, the rate of interest involved is much lower and the repayment term is much longer thus ensuring small repayment installments. This improves the credit score because timely payments are made possible. The rate of interest may vary from 7.9% to 15.9%.Bad credit is not much of a problem with respect to a debt consolidation loan as there are many agencies that specialize in working with people with a bad credit score. Debt consolidation loans can help people with a bad credit deal with their financial issues. These debt consolidation loans help one deal with multiple debts, bad credit and help manage oneâs debts and improve finances. One must however make sure that the loan amount is affordable and that it can be repaid on time. Debt consolidation loans are very helpful, but you must take only as much as you need.
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