Learn How to Get a Loan for Debt Consolidation in a Few Steps

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L E A R N H O W T O G E T A L O A N F O R D E B T
C O N S O L I D A T I O N I N A F E W S T E P S
B Y L E V E L F I N A N C I N G
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When managing your current debt obligations
becomes challenging, debt consolidation is one
way to make your life easier. This term refers
to the action of taking out a new loan to merge
multiple debts into one. The main advantage
usually lies in the new loans better borrowing
conditions compared to your current ones. This
means a lower interest rate or a more extended
repayment period, or both. As a result, you will
make only one monthly payment for a lower amount
than what you are currently paying on your
existing debt.
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Debt consolidation is not the same procedure as
debt resolution and debt management. The former
refers to hiring a debt settlement company or an
attorney to negotiate a reduction in the
principal you owe. The latter aims to make your
monthly payment (or payments) lighter by
negotiating a reduction in your interest rate or
fees. This article will give you some helpful
tips on how to get a loan for debt
consolidation, as well as explain the technical
aspects of this process.
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Lets assume that you are currently making four
different payments on your multiple debts, which
are first credit card second credit card
student loan car loan Here are your balances,
interest rates, and monthly payments for each
debt obligation.
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What if you consolidated these obligations by
taking out a 60-month loan with the following
conditions? A total loan amount of 36,800. A
10 interest rate. In this scenario, you would
have to make only one monthly payment of 782, a
considerably lower sum than what you are paying
now! On top of that, you would be debt-free in 5
years, a shorter time than the period you need to
repay your current student loan.
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With the same method, you can consolidate various
federal loans. These include Direct student
loans (both subsidized and unsubsidized) Federal
Stafford loans (both subsidized and
unsubsidized) Direct PLUS loans SLS (Supplemental
Loans for Students) Health Education Assistance
Loans
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Unsecured personal loans dont require
collateral, meaning you wont risk losing your
house or other assets if you cant repay your
creditor. However, unsecured personal loan
providers ask for more checks on your financial
situation. Here are some of the factors lenders
look at when evaluating your unsecured personal
loan application your employment situation
your debt-to-income ratio your FICO score
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If you have poor credit or your debt and income
situation discourages lenders from accepting
your unsecured loan application, you can resort
to secured personal loans. These instruments
allow you to give sufficient guarantees to
lenders by using an asset or a certain sum of
cash as collateral. If you cant pay the loan
back, the lender will take control of your
collateral. A secured loan can be a clever way
to consolidate your current debt if you have
assets that you are willing to sacrifice in the
worst-case scenario.
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