Why Shopping for a Consolidation Loan Could Save You Thousands

If you're like most Americans, you may be feeling overwhelmed by your personal debt. More and more families are struggling to make monthly payments on their credit cards, or to pay off medical bills and car loans. As a country, we are more deeply in debt than ever before. A 2019 study carried out by Experian found that total consumer debt in the US had reached $14.1 trillion, with the average American carrying a debt of over $90,000.

Fortunately, there is a simple way to ease your debt load and get your life back. Choosing the right debt consolidation loan can set you on the path to financial freedom - but it's important to pick the right loan for you. Shopping carefully to find the best loan will make all the difference in the world for you and your family.

 
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How does debt Consolidation work?

One of the biggest reasons that Americans are struggling to pay off their debt is that they are saddled with sky-high interest rates. Credit cards, payday loans, and other personal loans tend to come with exorbitant rates, which means that it's almost impossible to pay them off for once and for all. That's why it makes so much sense to consolidate your monthly payments into one, lower-interest loan.

A debt consolidation loan is a personal loan that bundles together all of your existing debts so that, instead of making multiple payments to multiple lenders, you make a single monthly payment. The right consolidation loan will offer you a significantly lower interest rate than your current loans. That's why so many people are turning to consolidation. The right consolidation loan makes it much easier to make payments on schedule, clearing the way for your family to eventually be debt-free.

However, not all debt consolidation loans are created equal. It's very important to choose the right loan for your individual needs. Sadly, too many people rush into loan agreements without taking the time to look at their options. That's a mistake. The truth is, if you're not shopping around carefully for your consolidation loan, you could be wasting thousands of dollars a year, if not more. Keep reading to learn more about selecting the right loan for your situation.

Getting the right rates

When you decide to get a debt consolidation loan, it's important to shop around and get the lowest possible interest rate. Doing this on your own can be a lengthy process but taking the time to look into your options can really make a difference. So, don't automatically sign up with the first company that offers you a new loan. One way to make this process much easier and faster is to use ClearOne Financial.

Ask about whether your loan will come with fixed rates (meaning that the interest rate is locked) or adjustable rates (meaning that the rates will fluctuate, depending on the market). In many cases, fixed rates are your best bet, but in some cases adjustable rates can be your friend - after all, if interest rates plummet nation-wide, then your adjustable-rate loan payments will suddenly fall too.

Don't forget that you can negotiate to get the best possible rates. Loan providers want your business, and, in many cases, they'll be willing to make a deal with you. Even if you have bad credit, or a history of missing payments, you don't need to accept the first deal that comes along. Talk to different companies and compare their rates. Talk to representatives to see whether they can make a different arrangement for you - you'd be surprised how flexible many companies can be.

Pay attention to fees

Many companies charge a standard set of fees which kick in when you take out a new loan. This can include an origination fee (when the loan period begins) and separate fees for overdue or missed payments. Take the time to inquire about all of these fees up-front, so that you know what you're getting into.

If you think there's a chance that you might be late with some of your payments (because you know that you're taking on extra expenses, for example) then shop around for a loan with the lowest possible fees. If, on the other hand, you're confident in your ability to make timely payments, then focus on other qualities that you'll need in a loan.

 
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Look at the term of the loan

Most of the time, a consolidation loan will lower your monthly payments but will extend the overall term of your loan. In other words, you'll be making smaller payments, but you may also be making payments for slightly longer than you would have been otherwise. It's a good idea to think about choosing a loan with the right term for you. It's all about striking the right balance --- you need a loan with reasonable monthly payments, so that you can pay on time and in full, but you also want a term that makes sense for you and your family.

Final thoughts

Dealing with money matters can be stressful and anxiety-provoking. That's why many people don't take the time to look at their options; instead, they tend to sign up for the first possibility. As a result, many Americans are over-paying on their loans, often by thousands of dollars a year.

Remember that no matter what your credit score is, and no matter what your financial history may be, you will benefit from shopping around before you settle on a debt consolidation loan. Remember to negotiate with the loan provider and get the best possible deal. Arming yourself with facts and knowing what to look for ensures that you will find the right consolidation loan for your individual needs.

If you are considering consolidating debt with a personal loan, call 888-716-4120 to talk to a debt consolidation expert at ClearOne Financial, or click here to get the process started.