Debt Consolidation Loan

Debt Consolidation Loan

Have you ever wished someone, anyone, would give you a loan or some other debt consolidation services in order to pay off all your debt? You can get this kind of loan, you just have to know where to look.

Not the Bank

The kind of loan you can get to pay off your debt is called a debt consolidation loan, and most of the time, you can't get it at a bank. Debt consolidation loans are mainly available through debt consolidation companies, but they do require collateral. So if you have a car that's paid for or anything that can be sold for the amount of the loan, it can qualify as collateral.

Some people think that by getting a debt consolidation loan, you're just trading one debt for another. That's true. But consider this: As of 2004, the average American household held $9,312 in credit card debt. By paying only the required monthly minimum (4% of the total balance) it will take 13 years to pay it off. To top it off, they end up paying $3,778.81 in interest (if the interest rate is 14%--most are paying more). That means that the grand total paid to the credit card companies is $13,090.81. But a debt consolidation loan carries an interest rate in the single digits. This means you can have the debt consolidation loan paid off in five years instead of 13 years and save a ton of money in the process. (Suddenly a debt consolidation loan doesn't seem so unappealing now, does it?)

One danger you run with a debt consolidation loan is the freedom you feel when all your credit card balances are at $0. But don't feel tempted to go out and run up another huge debt. This will only get you in deeper, and if your collateral is tied up in your loan, your only option will be debt consolidation. This is also a good plan, but the idea is to get rid of your debt and learn something from the experience so you don't get into debt again.

These days we do not even have to leave the house to handle our debt, look for all of your online debt consolidation options as well.

About Us | Contact Us | Site Map | What's New | View as RSS | Related Resources