How to Reconsolidate a Spousal Consolidation Loan

Debt consolidation loans can be financially beneficial. They can reduce monthly payments and monthly interest rates and they can help you get out of debt faster and more efficiently. If your spouse currently has a consolidation loan that is burdensome, you can help re-consolidate that loan--especially if you add your income and credit to the application. Often having two borrowers on an application will improve scores and reduce indebtedness.

Instructions

1

Access recent copies of your credit scores. You can get free reports at AnnualCreditReport.com. You should also pay for your FICO score (a three-digit number between 300 and 850), which represents your overall creditworthiness. Scores above 720 are outstanding and scores below 600 are poor.

2

Review the existing consolidation loan and determine its faults. These could be a high or adjustable interest rate, a term that is too short, a high payment or no flexibility. You must know why you are re-consolidating your loan so you can steer clear of these problems.

3

Look at lenders. Use your credit scores as a guide. If you have excellent scores, look only at banks and credit unions. If you have weak scores, you'll need to look at finance companies, too. Research all prospective lenders at the Better Business Bureau to make sure they have a favorable, honest reputation.

4

Fill out applications for two or three loan products. Make sure you are both on the application as co-borrowers. Present all documents to the loan officers. This includes your income paperwork (W2s, pay stubs), your existing consolidation loan paperwork and a loan statement for the existing loan. Loan officers need to verify income and review the current loan. This will speed up the pre-approval process. Alert the loan officer if you want to consolidate other bills into the new consolidation loan.

5

Compare all loan offers after they've been pre-approved by underwriting. Again review your financial goals and pitfalls to avoid. Make sure the loan you choose best meets your short- and long-term financial needs.