Debt Consolidation Loan

To consolidate means to combine, in this case it would be to combined several debts into one loan, usually for the purpose of reducing your monthly payments by extending them over a longer time period. If you have credit card bills coming in each month, along with car payments, the house mortgage, and a personal loan for that trip you took last summer, a debt consolidation loan can help you pay off credit cards, personal loans and other qualifying bills into one consolidated loan having one monthly bill to pay instead of several bills.

Here are some of the benefits to consolidating your loans:
1) Pay off credit cards and bills
2) A debt consolidation loan can help you reduce all those bills to one low payment
3) Cut credit card bills and unsecured debt in half while improving your credit rating
4) Manage and consolidate your bills to just one single monthly payment

Debt Consolidation Loans with Bad Credit
While some lenders may turn you down if your credit is less than perfect, there are many mortgage companies who will go the extra mile to earn your business. With some mortgage companies you can be prequalified in 24 hours and be funded your loan in as little as 7 business days, no credit check required, no home ownership required. There are a lot of mortgage companies in the world today, so loans are easier to qualify for, and interest rates are competitive.

Who Can Apply: Anyone who has unsecured debts such as: personal loans, retail department store cards, credit cards, student loans, liens, medical bills are all eligible.

Where To Find Debt Consolidation Loan Information: You can get a Debt Consolidation Loan from many different sources. You may be familiar with banks, savings associations, mortgage companies and credit unions who provide Debt Consolidation Loans. Some starting places to look include:

1) Your own bank or financial institution, sometimes lenders can offer better mortgage terms to current customers.
2) Online Internet research.
3) Family members, friends and coworkers may be full of information that could help you.
4) Your local newspaper or the good old yellow pages.

You may be eligible for a Debt Consolidation Loan insured through government programs, such as the Federal Housing Administration (FHA). These programs usually require a smaller downpayment. Ask lenders about these programs.
You can also contact the Federal Housing Administration (FHA) at:
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410
Telephone: (202) 708-1112
TTY: (202) 708-1455

Computer loan origination systems, or CLOs, are computer terminals sometimes available in real estate offices or other locations to help you sort through the various types of loans offered by different lenders. The CLO operator may charge a fee for the services the CLO offers. This fee may be paid by you or by the lender that you select.

Be cautious of debt consolidation plans. A debt consolidation plan allows you to make just one payment to the consolidator, instead of numerous smaller payments to your many creditors. These plans are not always the best option for your overall financial health. The consolidators may promise to lower your monthly payments, however, this action will extend the length of time it will take to pay off all your debts and ultimately you may pay more in finance charges. Make sure that you are with a reputable credit counseling agency before you enter into any debt consolidation plans. The use of debt counseling may appear on your credit report. Some creditors consider this activity negatively, some may consider it as a positive step.

You may be able to lower your cost of credit by consolidating your debt through a second mortgage or a home equity line of credit, but remember that these loans require you to put up your home as collateral. If you can't make the payments, or if your payments are late, you could lose your home. What's more, the costs of consolidation loans can add up. In addition to interest on the loans, you may have to pay "points" with one point equal to one percent of the amount you borrow. Still, these loans may provide certain tax advantages that are not available with other kinds of credit.

References:
www.ftc.gov/bcp/conline/pubs/credit/kneedeep.htm

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