If you’ve found yourself bogged down by credit card debt or irritated with making multiple credit card payments multiple times a month, then a credit card consolidation loan may seem really appealing. Especially the type that are sent to you directly from your credit card company. However, as with anything in life there are pros and cons and it’s important that you weigh both sides before making a decision. Below are a few important questions that you should ask before applying for a credit card consolidation loan from a card company or any other lender.
What’s the Interest Rate?
This question comes with a lot of follow up questions as well. Is the rate variable or fixed? How does it compare to the rates you’re currently being charged on your credit card debt? Will it save you money? How much? Credit Card Consolidation loans only make sense if they will help you save money and get out of that debt faster. It’s important to really pay attention to the interest rate and how it will affect what you’re paying back today, and if it’s a variable rate then it’s important to pay attention to what you’ll be paying down the road as well.
How Much Debt Do You Have?
Or more specifically, how much credit card debt are you looking to consolidate? Is it a credit card that didn’t have a large balance to begin with, or is it a $10,000 debt or more? Many companies will refuse to offer consolidation loans on higher debt amounts if you don’t also have good credit.
How’s Your Credit?
If you want to qualify, let alone get a good rate, you’re going to need good credit. If your credit isn’t the greatest then you may find yourself unable to qualify for a loan in the first place, and if you are able to secure one you might wind up with much higher interest rates. Asking about the credit qualifications for a loan before taking the time to apply might save you some time and hassle in the long run.
Who’s Offering the Loan?
It’s very important that you choose your lender carefully. Is it being offered from reputable bank or credit union, a company that you’ve been with for years, or a debt consolidation agency that you’ve never heard of before? When it comes to loans it’s wise to always stick with reputable lenders. Many times, your credit card lender is also a big bank, so that works out fine.
It’s important that you weigh the pros and cons before deciding on a credit card consolidation loan. There are other debt management options that you should take the time to look into as well, such as debt management plans, working out a debt settlement with the lender, or even transferring high-interest credit card debt to a new card with a lower interest rate. Choose the option that’s best suited for you personally.
If you find yourself struggling with debt or would like to find out about becoming debt free, call Debthelper at 800-920-2262, or visit @ www.debthelper.com.