It is not difficult for people to accumulate a high debt. But, when it comes to the paying off stage, scenarios tend to become much critical. According to a recent survey, those who find it difficult paying their cards off on a monthly basis have an average card balance of around $16,000. But, there is nothing to be worried about. There are several ways to control this situation. You can apply for personal loans that come with a minimal interest rate. Use this loan to repay the earlier debt with higher interest rates. Thus, you can easily save a good percentage of your fortune with the policy.
Debt Consolidation Process can be the Best Option
The debt consolidation process can well be confusing for those who don’t possess clear ideas about it. Certain questions always come up: how much money to borrow? How such loans are repaid? What is the scenario once higher interest-based debts get paid off?
The fortunate part is that the consolidation process related to debt does not take much time to get completed. There are only a few steps to follow.
4 Steps to Follow while Considering Debt Consolidation
Figuring out your exact requirement
You must calculate what and how loan amount will be sufficient for you. For this, you are required to add up everything that you owe. The entire amount is what you are required to borrow. There are a few who prefer applying for a slightly higher amount than their actual debt to take care of other balances, bills or to fix a part of their financial stature.
Focusing on the repayment length
Repayment periods and terms differ from one company to another. While some companies may offer 24-36 months repayment period, there are also those that offer 48-72 months period. Again, some companies do not extend their debt repayment period to more than 18 months from the day of the loan being offered. It all depends upon your spending capability that ultimately finalizes the best loan terms you will be availing. However, you must compare different policies and then figure out the option suiting your financial condition the most.
Checking for the fee structures
There are quite a few companies that ask for origination fees when offering a loan. It is basically a charge to administer the loan. It can amount to something like 5% of the total loan amount being sanctioned. Add to it the prepayment charges where a certain fee is charged in case you are planning to repay the entire loan amount in advance. However, certain companies don’t charge any of these fees while providing the loan.
Check your rate
This may well be an optional step but is considered to be highly effective for letting you get some clear understanding of the scenario. This process also allows you to understand whether you are eligible for a loan or not. It also lets you understand the best interest rate you are going to receive. Also, there is no harm being done to the credit score.
The entire debt consolidation application process can be one long and tedious one. But, if you take the online route, scenarios may improve for the better. It will take just a few steps to get away with the application process. It is fast, convincing and easy. Some companies offer email application procedures and telephonic loan approval schemes.
Every company will ask you to provide address, name and social security number. There will also be a certain set of questions that you need to answer. These questions will be related to your monthly income and housing debts and also the total amount you tend to borrow.
So, what are you waiting for, take the essential steps and pay off your debt as quickly as possible!Image