Debt consolidation loans are great and efficient solutions that can help people suffering from the stress caused by their debt situation – solutions that are nowadays provided by various types of financial institutions. If you already know how these special loan constructions work, here is some information about where you can find the most suitable loan.
Banks and Credit Unions
Most people apply for debt consolidation loans with banks and credit unions. National and community banks usually offer long-term (usually 60 months) secured and unsecured consolidation loans to people with good credit scores – the stronger your credit score, the better the conditions provided by banks. Credit unions offer debt consolidation loans to people with less than perfect credit scores, too and their loans usually come with shorter loan terms, 36 months being the standard.
Other Types of Lenders That Provide Debt Consolidation Loans
You can choose to apply for a consolidation loan with peer-to-peer lending services. The interest rates available with these loans are calculated based on the applicant’s credit scores, but they usually offer more favorable interests than the rates offered by banks. These loans come with shorter loan terms than in the case of banks, 36 months being the standard and there is also an upper limit to the loans provided that may be lower than the loan limits provided by banks.
You must know that P2P lenders are usually available exclusively (online operation is in fact one of the reasons why the loans provided by these companies are cheaper), so don’t expect personal counseling. You must also know that P2P lending for consolidation purposes is not available in all states, so make sure that you check regulations in effect in your state before searching for a suitable lender.
Payday lenders also offer loans that can be used for consolidation purposes. These companies offer their loans without credit checks, but the interest rates they practice are usually much higher than the rates you can get from other companies and the loan terms are usually very short, in some cases not longer than a month, so these loans make good solutions only for temporary financial problems.
When it comes to debt consolidation, there are many different types of loans that you can apply for and you have several options when it comes to the financial company you choose as partner – just make sure you do the math before you apply and you will surely be able to make the most of the consolidation method chosen.