Direct Loan Consolidation

Written by Ingrid Chen
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No matter what you may have spent your money on, everyone in debt is there for the same reason. They spent money they didn't have. Well, you may have thought you had the money because you got a loan or because you had a credit card, but that's not really your money to begin with. Being in debt is a very restrictive way to live. You feel you can't do certain things because you have some big bills to pay at the end of the month.

If you have more than one loan to pay back, perhaps from college or a business you started, you can start to feel very overwhelmed. There are ways to help take the burden off, though. You might want to think about direct loan consolidation. For consolidation, you can go to the lender of your choosing. You don't have to stick with the company that loaned you money in the first place.

Finding a Lender

When you consolidate all your loans, you basically take out a new loan to pay off all your other loans. You then have just one bill a month. Hopefully, you will also have a lower monthly payment as well as a lower interest rate. With all the companies that are out there today, you want to be on the lookout for scams. If anything seems too good to be true, it probably is.

In addition, most consolidation lenders will require a fee. However, this fee should not have to be paid until you have been approved for your loan and have received the money. Once your loan goes through, make some financial plans to pay back more each month than is required. This will not only allow you to get out of debt faster, it will also improve your credit rating.


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If possible, find a new bank in your area nlliiwg to give you a personal loan. There are banks like that believe it or not that will give you a loan with no credit/poor credit. I received an unsecured loan before, but in most areas it is more difficult. You have to do some math. Consider how much debt you are in, how much you can afford to pay and what are your future lending needs. If you are in say 10K of debt and can make more than the minimum payments but its difficult buckle down and try to only spend the bare minimum. Split your debt..meaning take a loan out for part of it, or get someone to co-sign for another credit card with 0% interest for 1 year. If you are paying 18% interest on your 10K debt and split your debt, only paying half the interest so Instead of 180 dollars in interest a month, its 90. $2160 in interest a year or $1080, which is better?? It can be the little things that help. I had a friend that had a credit card with 0% interest for a year, and his other card with 16%. For some odd reason he would pay larger payments to the 0%..Pay off what has the most interest first, of course. Anyhow, debt consolidation is a bad idea. If your really behind on payments, just settle your debt..and then make sure to build it back up after .sooner you settle your debt, sooner you can recover..