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Online Consolidation Loan - How to Navigate Online Consolidation Loan Providers - Federal Loans, Consolidation, Debt Service Companies

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Online debt consolidation has become very big business over recent years. It is to the point where hundreds of different companies pop up when you search for anything related to debt relief, leaving you feeling more overwhelmed than ever! It can be hard to know who to trust, or even what the difference is between different services. Well, not to worry! In this guide, we will look at the main types of online debt consolidation services, and how to choose the best one for you.

Before you start this guide, it is a good idea to take inventory of all your current loans, their interest rates, and their remaining principal amounts so you have an accurate picture of where you stand.

Federal Loans

If you have loads of student loans that continue to weigh you down for years after graduation, the U.S. government has an online application process you can fill out to attempt a consolidation, which could lower high interest rates and simplify the monthly payment process. Check out their site here to apply online. You can also get helpful information on the specific loans that qualify for this consolidation, potential new interest rates, and just about anything else you need to know about the program.

Consolidation

Every major bank can provide you with the simplest form of debt consolidation, which is simply taking out one large loan to pay off all smaller debts, thus accomplishing a kind of “do it yourself” debt consolidation. Look at your bank’s web site for further information on applying for a loan – any major bank and most local small banks have online applications.

If you are a property owner, the most effective loan will likely take the shape of a home equity loan. Because it uses your home as collateral, you are likely to get lower interest rates on this kind of loan, which in turn saves you more money as you get rid of higher-interest loans.

If you do not own a home, you may still be able to qualify for a personal loan or other line of credit. However, these kind of unsecured loans usually have significantly higher interest rates, so you should look carefully at your existing loan rates to make sure you will save money by making the switch.

Whenever shopping for a loan, make sure to get rates from a variety of sources to find the one that will work best for you. Also note the fine print, and make sure you are aware of all potential risks and penalties for the loan.

Debt Service Companies

Many of the “debt relief” companies you see online are offering more comprehensive debt services. While many of them include debt consolidation as one of these services, they also specialize in dealing directly with creditors to negotiate lower interest, lower monthly payments, lower lump sums, etc. They also provide various debt-management programs for the customers themselves, which are geared toward building better credit habits and setting reasonable monthly payment and savings goals.

These companies can be helpful to those who are overwhelmed with debt, unable to make payments, and having troubles with collection agencies. If you are to the point of considering bankruptcy, they may be able to provide a less-severe alternative while still reducing stress in your life. Consumers that are not this far into debt may still benefit from a good debt relief program, but this is probably something that they could accomplish just as easily on their own through internet research.

If you are in a severe enough situation to use a debt relief services company, choose carefully. These companies know that their clientele are desperate, and some take advantage of this fact. Be sure you know everything about their fees and what will be expected of you before signing on for any services. And if it seems like they are making promises that are too good to be true, they probably are!

That is it for this guide to navigating the vast sea of online consolidation loan providers. Now that you know the main three types of “debt consolidation”, it should be much easier to choose the type that is right for you. Good luck!

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