Debt consolidation loan is a very important tool for people especially who have borrowed money. It combines all your debts into one and thus helps to pay off the debts easily without any tension. Secured debt consolidation loan is one such type of loan. The benefit of this type of loan is the less interest rate which in turn reduces your monthly repayments.
To understand it better let us consider a person who has taken loan from three different lenders at 15%, 20% and 25% respectively which are high. The average of these rates is 20% which is yet not less. So now with the secured consolidation loan you can decrease your interest rate to as much as 6% to 18% as per your credit status.
Here are the steps included in debt consolidation:
- Calculation of all different debt consolidation loans taken from different lenders and consolidating them.
- Now you need to negotiate with all the lenders and creditor and come to a final agreement.
- And finally you pay the creditor the decided amount.
All these steps can be performed by firms providing consolidation loan. They will get you the best deal available in the market. The quick processing of the loan in case of secured loan is the second benefit. You can easily get a loan of ?5000 to ?75000 with secured debt consolidation loan which depends on the monthly income or other savings. It is a common misconception that you won’t get a loan if you have a bad credit or bankruptcy. Although you won’t get loan at much lower interest rate or on easy terms but you can avail loans. You should know your credit score to make sure whether you have a good credit or not. Generally a credit score of 620 and above is considered as good. So you should have proper plans and understanding of the terms and conditions of the firm before getting into any deal.