Locating the Best Debt Consolidation Loan | Ways To Reduce Debt

Article by Paul Parker

Locating the Best Debt Consolidation Loan ? Finance

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The best debt consolidation loan that you can find isn?t always obvious, but with it you?ll be able to take multiple debts such as personal loans or credit cards and combine them into a single monthly payment. Many loans can offer money to help your finances, but the best debt consolidation loan will provide money to pay off bills and debts while keeping the interest rate that you?re paying low so as to keep your payments manageable. Individuals of all credit levels can apply for the best debt consolidation loan, and depending upon the lender the loans may be secured or unsecured.

Secured Loans and Unsecured Loans

The best debt consolidation loan is most often secured against some property of value to guarantee that the loan will be repaid. This property is most often an automobile or real estate, and is referred to in the lending world as collateral. A secured loan means that the lender can negotiate a lower interest rate than a borrower?s credit score may allow, but the lender can legally take possession of the collateral and sell it to regain the money that they lost through the loan if the borrower defaults on the loan.

Alternately, some consolidation loans may be unsecured. Unsecured loans feature a higher interest rate than secured loans, but they lack collateral as a guarantee of repayment and therefore have less of a risk to the borrower. These types of loans are usually used to consolidate other loans held at the same bank or finance company and are issued to regular customers or to customers with a very good credit rating.

Shopping Around for a Consolidation Loan

Unless you?re combining loans at a single bank or finance company, it?s a good idea to shop around and compare interest rates among several institutions in order to find the best debt consolidation loan that you can. When comparing the rates and terms of several lenders, you should always use the same collateral and request the same amount at each so that you can get similar quotes for the same loan at the different locations.

Lenders that you?ve worked well with in the past will be the most likely to give you the best rates. Seek these lenders out first, and then check a few other banks or finance companies that you?ve never dealt with to in order to see if the rates that they offer are any better.

Finding Your Best Offer

Once you?ve obtained several quotes for the best debt consolidation loan, you need to compare both the interest rates and the repayment terms that each quote offers. You should seek out a lender that is offering the best balance of a lowest interest rate and flexible terms, since the lowest rate doesn?t always mean the best loan. When you find the lowest interest rate with terms that you like then go back to that lender and apply for your loan, making sure that you get the same rate and terms that you were quoted.

About the Author

Paul Parker writes finance and loan articles for the Secured Loans UK Online website at www.securedloansukonline.co.uk

Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author?s information and copyright must be included.

Paul Parker

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Paul Parker writes finance and loan articles for the Secured Loans UK Online website at www.securedloansukonline.co.uk

Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author?s information and copyright must be included.

Source: http://www.waystoreducedebt.net/locating-the-best-debt-consolidation-loan/

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