Debt consolidation loans from various financial institutions in Livonia are one option to consolidate debts. If the loan has better terms than the consumer debt getting consolidated then the result will be lower interest rates and lower debt payments. The problem usually is finding a debt consolidation loan that has more favorable rates. Doing so all most always requires the debtor to secure the loan with collateral. More often than not this collateral is a residence and the loan is a home mortgage.
An Unsecured Loan
If there is no collateral available or the debtor does not want to provide any then the only option is to get an unsecured loan. Unsecured loans with better interest rates and payment terms than standard “off the shelf” consumer debt can be very hard to find in Livonia, especially in today’s credit markets. If credit is not perfect then most likely only a subprime personal loan to consolidate debt will be available. This has a very low chance of improving the debtor’s financial situation and will most likely damage it.
Livonia – Personal Loan to Consolidate Debt
When interest rates on student loans rise, many college students begin to consider student loan consolidation. There are both benefits and disadvantages to student loan consolidation. This article explains the pros and cons of consolidating student loans.
Consolidating your student loans locks you in at the current interest rate. This means that, if interest rates rise, you will continue to be responsible only for your original fixed interest rate. Unconsolidated student loans have variable interest rates that fluctuate from year to year.
Consolidation loans generally have longer repayment periods. Unconsolidated student loans have a maximum repayment period of 10 years. Consolidation loans may have repayment periods up to 30 years. This means that monthly payments may be lower on consolidated loans.
On unconsolidated student loans, the government pays the interest on your loans for six months after you graduate. This means that you wouldn't be responsible for a payment during this time. However, consolidating your student loans forfeits this grace period. You will be responsible for payments on your loans immediately after graduation.
If you consolidate, you are locked in at the current rate for the lifetime of the loan. If you don't consolidate, your interest rate will fluctuate depending on economical conditions. It is possible that interest rates will drop lower than the current rate in the future. Visit www.abcloanguide.com for various student loan consolidation services.
If you consolidate under a longer repayment period and make only the minimum monthly payments, you will pay more interest than you would on in a shorter repayment plan. This could cost you thousands of dollars over the lifetime of the loan.
Things You Need to Know Before You Consolidate Debt Loans
The best and easiest way to consolidate debt loans programs is the federal government debt consolidation loan programs. While these federal government programs are the best for student loans, there are some other options from the private sector which are relatively good as well.
Private loan consolidation lenders, agencies and companies
There are many private consolidation lenders and companies that offer these programs to all students seeking some financial help. Student seeking to obtain or looking for such federal government loans should be aware of some tricks and ploys these companies try to do. They do all kinds of tricks in order to get you to consolidate debts with them.
Here are some tips you have to consider and watch out for when you consolidate debt loans:
The most frequent line of talk used and employed by these private agencies and companies. They will inform or tell you about the free debt consolidation loan program of the Federal Governments-US Department of Education. When a student or borrower hears the word Federal Government, They assume that they are talking to the department of education representative or employee. The trick here is for you to have a sense of actually feeling that you are talking to the federal government which is not.
Always bear in mind when talking over the phone to ask what company he/she is working for. What these private agencies and companies try to portray is a feeling a trust. Once you trust who you are talking to you go deeper into the details of what you are looking for and sometimes get trapped. And by trusting them you are trapped and would be willing to give out some personal information which they always look to obtain from their prospective clients. So beware of these tricks.
There are other tricks which they try to use or employ to lure you as one of their upcoming borrower.They will convey to you a sense of urgency and that you have to do it right now or lose out on it.They will claim that now is the best time to consolidate debt loans because interest rates are low.
They will use the low interest rate now and that sense of urgency to try to get or lure you into doing your consolidation now before the interest rate will go up.
They will offer X amount of percentage discount on the interest rate if your payments are made by automatic payment direct debit from your bank account. This to me is a red flag. Do not give access to your bank accounts.
They will try and ask for your student account number which in most cases it is your social security number. If you give this information to them, they can find your record on the national student loan data system (NSLDS). Here, they can see if you are eligible or not. This is a way for them to make you give your social security number.
They will always try and make you feel that what they are offering is a federal program. Simply put, they will reiterate that it is a federal program through the federal government.
Always consider these tips before deciding to consolidate debt loans.