Getting a debt consolidation loan requires a few steps: prequalifying, choosing your loan terms, finalizing your application and closing.

1. Prequalify. Prequalifying uses a soft credit check to produce a rate quote, which will estimate the minimum loan amount you’re approved for and the interest rate.

2. Choose your loan terms. Your loan terms set the repayment schedule, loan amount and other features. Typical loan amounts range from $1,000 to $40,000, depending on your creditworthiness.

Most borrowers have between two and five years to repay their loans. You will confirm your interest rate and any origination fees — typically 1% to 5% of your loan.

3. Finalize your application. You’ll confirm the details of the loan and verify your identity, annual income and other qualifying information. Some lenders allow you to apply on a secure website.

The lender will pull your credit report to verify creditworthiness, which will result in a hard inquiry on your credit. Be certain of your choice when you apply because too many hard inquiries in a short period of time could pull down your credit score.

4. Get approved and close. Once approved, the loan will go through the closing process, and you will receive funds. Most debt consolidation loans provide wire transfers, but some offer direct payment to creditors or send a check to you for deposit in a bank account. You may receive funds as soon as the next business day.

What Are the Alternatives to Debt Consolidation Loans?

Debt consolidation loans are a good option for many people with debt, but they aren’t the only option. Debt consolidation comes in many forms. If you can’t qualify for the best personal loan with good repayment terms, alternatives include:

Home equity loans. They generally have better interest rates than unsecured personal loans because using your home as collateral makes these loans less risky for lenders. And you can get lower monthly payments, as loan repayment term lengths can be 10 years or longer. But you could lose your home to foreclosure if you can’t make your payments, and if you face bankruptcy, discharging a home equity loan compared with unsecured debt is much harder.

Balance transfer credit cards. You can move credit card debt to a card with a 0% balance transfer APR and make interest-free payments on the new balance for up to 21 months. Though, you’ll pay a fee of 3% to 5% of the balance you transfer. By comparison, personal loans for debt consolidation could offer term lengths as long as 60 months, though you’ll have to pay interest.

Learn more about 0% APR balance transfer credit cards with the U.S. News Best Balance Transfer Credit Cards Guide.

Debt relief services. Certified nonprofit credit counselors can help you strategize how to pay off your debt and negotiate with creditors to lower your interest rates and fees. A counselor may recommend a debt management plan to pay your creditors. The plan may require fees, such as a setup fee and a monthly fee.

Debt settlement. Usually, for-profit debt settlement companies negotiate with creditors to settle your debt. But debt settlement companies charge high fees and penalties and even higher interest rates. And you can damage your credit history if you stop paying your bills. Consider debt settlement companies as alternatives to bankruptcy because the damaging effects to your credit report can be long lasting.

Bankruptcy. Declaring bankruptcy is a last resort if you can’t pay your debts.

Bankruptcy will hurt your credit and may remain on your credit report for up to 10 years. You will lose all of your credit cards, some or all of your luxury possessions — such as designer clothes or multiple vehicles — and any property that is not exempt from sale. But if you have serious debt and are being sued by creditors or have a pending foreclosure or repossession, bankruptcy can be a lifeline.

Contact US TODAY to see how we can help you secure a debt consolidation Loans.

Real Bridging Finance Ltd

Email: funding@rb-financeltd.co.uk

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