Find a Debt Consolidation Lender
Contributed by Melanie Vannuys
How To Find A Debt Consolidation Lender...
If, daily, you find yourself robbing Peter to pay Paul to cover you debts, you may want to talk to your financial lender about debt consolidation. But how do you determine what type of debt consolidation is best?
The first place to look before answering this question is in your bill drawer. You need to go through your monthly bills and determine balances, interest rates and other fees for each of your bills and start from there. Once you've determined how much you owe, you can then make a logical, informed decision about debt consolidation - before you even talk to your lender.
There are a few different types of debt consolidation loans that a lender will try to get you to use. A home equity line of credit or a second mortgage are two of the most common. But again, before you decide, make sure you know all of the ins and outs of both options.
Will My Debt Consolidation Lender Tell Me All The Facts?
By law, your lender is required to tell you everything you need to know about either a home equity line of credit or a second mortgage. It's called the Truth in Lending Act.
Most home equity lines of credit come with variable interest rates, not necessarily the best thing over the long run. If interest rates are low, great! But if they are up, as in recent trends, well, not so great. Some lines of credits or loans will come with attractive introductory rates, but will either shoot up or change to a variable rate once the introductory period is over. These are the types of things you'll want to ask your lender.
You'll also want to find out if there will be fees tacked on at the front end of your loan or if there will be closing costs or annual fees. Find out if the payments are lower with a balloon payment at the end of the loan or if the payments are slightly higher with no balloon payment.
