How to Find the Best Company for Consolidation Loans

Debt consolidation companies can be reputable, helpful services that assist their customers in getting out of debt or nearly criminal enterprises that end up ensnaring vulnerable, undereducated consumers in a web of even larger debts than the ones they were trying to get out from under. Finding an excellent debt consolidation service requires some research and a willingness to compare offered consolidation loan rates.

Instructions

1

Apply for a personal loan from a bank or credit union if you still have a reasonably strong credit score (above 680 on the FICO scale). If you win approval for a personal loan, you can consolidate your higher interest debts yourself without paying the fees that will be attached by a debt consolidation service. In some cases, banks may offer special rates on loans used for debt consolidation.

2

Contact a non-profit consumer debt counseling service before working with a debt consolidation company. You can get a referral from the National Foundation for Credit Counseling. These companies will take a look at your finances and your debt situation and advise you on how to best proceed. If you still think that debt consolidation is a good idea, the service will be able to refer you to reputable debt consolidation companies.

3

Check any debt consolidation company that you're interested in with the Better Business Bureau. Read the reviews carefully. Many debt consolidation companies charge very high interest rates and fees that make their services less valuable than it would be otherwise.

4

Compare the interest rates and fees that you are offered by various debt consolidation companies to find the best fit for your debt problems and budget. If a company refuses to quote you an interest rate or to explain their fees, don't work with them.

5

Read any agreements carefully before deciding to work with any debt consolidation company. Ask questions if you're confused about anything in the contract. Find out what happens if you become late on your consolidated loan payments. Hidden fees can cut into the utility of a consolidation loan.