A debt consolidation loan may provide great respite for those who happen to have large existing liabilities. However getting a debt consolidation loan need not always mean savings.
Debt consolidation loan does not truly free you from debt. Shocked?
Read on to know why all that you see is not what you get!
All that glitters is not gold
For many people a debt consolidation loan implies convenience - the convenience to pay one single bill instead of 20 or 30 odd bills in a month. It also implies hassle-free consolidation of all existing liabilities under one umbrella. What's more, if the interest rate is supposedly lower than existing ones, what could be better than a debt consolidation loan? Fact is that convenience alone is no guarantee of the fact that you will incur savings.
The interest rate
Most of the time a debt consolidation loan will promise you a lower interest rate than your current liabilities. But ever wondered why a bank would do charity to save you from debt? There is always a catch in the agreement of the debt consolidation loan. To know if the interest rate is truly lower than current rates, be sure to check interest rates on each of your existing liabilities. Then check this with the offered rate on the debt consolidation loan. If it really is lower, the next thing you need to check is if this is a promotional rate or not. Many banks will try to lure unsuspecting customers by offering a debt consolidation loan with a low interest rate. This is usually a promotional rate and ceases after the promotional period gets over. Therefore, be sure to read the fine print of the agreement very carefully to check what is the interest rate after the promotional period. Chances are the rate will be much higher than even normal rates!
Shop around
As a borrower of a debt consolidation loan only you know how risky it is to entrust all your debts with a single bank. You do not want to lose all your hard earned money, do you? So the best thing you can do is to shop around, hunt for the best deals in the market and do your own bit of research. This way you will not only learn about promotional schemes on the debt consolidation loan but also find ways to negotiate and bargain your way through. Many times credit unions tend to provide more attractive rates than banks. Be sure to check on them as well.
Unsecured debt consolidation loan
There are the secured and the unsecured varieties of a debt consolidation loan. In the unsecured variation you do not need to provide any security or collateral to the bank or credit union. This is especially useful for those who do not own any security - like for example paying guests, tenants, dependants who live with parents, as well as other such people. Repayment periods of an unsecured debt consolidation loan lie between 6 months to even 10 years.
When dealing with finances ensure that you consult with the right resource. Make the right decision. To find out how you can get a win-win situation log in to Online debt Consolidation today. It's your best resource on this topic. Hear it from the experts!
With literally hundreds of credit cards at your disposable, choosing the one that's right for your lifestyle can be a daunting task. You always want to ensure you get a credit card that meets your needs while offering the best rates and the biggest rewards. You can search dozens of local banks and lending institutions, scour the internet, or randomly select a credit card OR you can use our convenient online credit card comparison tool to find exactly the card that's best for you. Our credit card comparison tool will allow you to view credit card details side-by-side in an easy to understand cross grid. You can even select a card and approve online, in some cases being approved within minutes of submission! It truly is the smart way to shop for credit cards!
Print this page
