Sunday, September 22, 2013
Criteria For Getting a Debt Consolidation Loan
If you are considering looking for a debt consolidation loan, you need to be aware of the criteria for getting one. It does not always mean that when you are in bad liabilities, the way out for you is a consolidation credit facility. It works best for some people than for others. You therefore need to start by understanding what this credit facility is and how it works.
To begin with a debt consolidation loan means that, you will apply for some money which you will then use to clear all outstanding bills and liabilities. You will then be left to repay this amount at lower interest rates and at a reduced time period. The amount for which you qualify will largely depend on how much you owe your creditors as well as the amount of interest that you are charged by each.
Getting a consolidation loan requires that you demonstrate to your new lender how you intend to settle the bill. Remember that, being in bad bills already says so much about your inability to handle finances. You must therefore be able to convince them about your plans in case you, for example lose your source of income, or other unforeseen eventualities arise. If you cannot provide concrete justifications, them many lenders may choose to give you secured credit facilities.
Secured credit facilities give the lenders an assurance that they have something to fall back on in case you default payment. Such credit facilities will, in most cases be accompanied by lower and affordable interest rates. Once you have cleared your financial mess through the consolidation method, avoid the mistakes that led you into bad debts in the first place. Be sure to make prompt payments to your creditors.
