How to Get a Good Deal on Low Interest Debt Consolidation Loans?

A consolidation loan can be used to pay off high-interest rate credit cards or bills and consolidate them into one monthly payment. When consolidating payments it is important to get the lowest interest rate possible on a consolidation loan. Because the payment amount is based on principal and interest, a lower rate can reduce the monthly amount due. Using online resources to search for the right loan can save time, which in turn saves money.

Instructions

1

Check your credit report free. An online site offers everyone a free credit report once a year (See Resources). Print off your credit report and go over it. Make sure there are not any problems. If a discrepancy is found, contact the credit reporting agency immediately to correct it.

2

Keep your credit score high. The higher your credit score is, the lower the interest rate will be one your consolidation loan. Make all payments on time and avoid maxing out credit limits on your cards to keep your credit score high.

3

Gather all of the information on the outstanding loans and credit cards you want to consolidate. Check the pay-off balance of each to make sure you do not miss anything before check on a loan.

4

Use the equity in your home to consolidate bills. Check on getting a second mortgage, equity line or refinancing your current home. A home equity loan generally has a lower interest rate than a personal loan. Also, the interest from a home equity loan is tax deductible saving you more money each year. View companies online that offer home equity loans or contact your current lender for rates.

5

Shop around for interest rates on consolidation loans (See References). Using a lender broker can help because he has access to more lenders at one time. When using a loan company they will only have their programs to offer.

6

Get a strong co-signer. Even if your credit score is not that great having a co-signer with good credit and a high credit score can reduce your interest rate.

7

Use a credit card offer to transfer balances. If you are unable to get a low rate on a consolidation loan, consider contacting your credit card company and see if it will offer a low rate to transfer high-interest rate credit cards and consolidate them into one payment.