Low Interest Debt Consolidation Loan – Getting A Low Rate

The current education and work scenario make it very difficult for most of us to stay away from taking loans. You borrow money for several reasons and you might not be able to pay it back promptly for several other reasons. When you feel that you are at the risk of getting too many bills accumulated and you feel you are not able to manage many small payments, you look out for a debt consolidation loan.


What is a debt consolidation loan? A debt consolidation loan is one big loan that covers all your small debts. The obvious advantage of this is that you have one repayment that you need to make and you have one creditor you are responsible to. Moreover, the consolidation loan generally comes at better terms (e.g. lower interest rate and/or longer repayment period). Not only will this loan save you from annoying calls from various creditors but it will also give you a chance to channelize and organize your budget and finances. Out of the available options, the low interest debt consolidation loan is one that is quite preferred.

Low interest debt consolidation is favored because you have to pay less every month and you have enough money to live a moderately decent life. There are certain criteria that you need to fulfill to be eligible for a low interest debt consolidation loan. They are:

1. Stable income: This is a prerequisite for almost any loan, because a stable income would mean that you have the ability to pay back all your bills. If the bank feels that you have a job and you will stick to working for a reasonable period of time, they will grant you a low interest debt consolidation loan.

2. Good credit scores: Anyone who knows anything about debt consolidation loans will tell you that it is a foolish idea to hope for a low interest debt consolidation loan if you have bad credit scores. Bad credit scores, to bankers and financers, almost always means that you will not pay back again or that you will renegotiate the amount due and this is exactly what they don’t want. Good credit scores however speak very well about the person and a low interest debt consolidation loan is almost always given.

3. Collateral: Banks are wary of giving people a very long repayment period because the longer the repayment period the more are chances of something going amiss. Banks and financial institutions usually demand collateral for low interest debt consolidation. This is usually in the form of a house or any other strong collateral. Low interest debt consolidation loans are extremely helpful in the sense that they let you live your life comfortably while repaying the loan as well. But pledging collateral is always risky and you must remember that if you don’t repay, your house/collateralized-asset can be at risk and you might end up on the street.

So, ultimately when you need a low interest debt consolidation loan you need income, good credit and collateral.

But what happens with bad credit low interest rate debt consolidation loans? Do they even exist?

It is usually a futile attempt to expect low interest debt consolidation loans if your credit scores are bad. But there are financial institutions that are offering bad credit low interest rate debt consolidation loans because some feel the reasons for bad credit can be many. It is important for those with bad credit to be aware and go about looking for a low interest debt consolidation loan systematically. One must not be carried away by fancy advertisements promising this, that and everything. Getting help of friends, family and reputed institutions, people with bad credit can look out for low interest debt consolidation loans.

1 thought on “Low Interest Debt Consolidation Loan – Getting A Low Rate”

  1. Debt Consolidation Refinancing has hit an all-time high as people move their mortgages around to reduce their monthly repayments to improve cash flow… Fixed rates have been at an all-time high as well as people look for repayment security…

    However, with the banks tighter credit lending guide is unfortunately stopping a lot of people from successfully refinancing and consolidating their personal debts…

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