Debt Loan Do’s and Don’ts in the New Economy

Executive Summary By Tiffany Dow

With financial uncertainty swirling around us, and debt ratios being very high for some of us, the temptation to apply for a debt loan, or debt consolidation loan, is great.

Let’s first look at the don’ts to debt loans:

Don’t assume that getting a debt loan is easy or cheap

If you are aren’t a good risk for a loan, your debt loan is going to come at a price, even if your overall monthly payment is lower.

Don’t assume that consolidators who promise to fix everything by getting you lower interest rates and cutting your payments are being completely truthful.

Many of them add a fee to your payment, while also getting a kickback of sorts from your creditors.

Now for the dos:

If your credit is decent and you have a home with a fair amount of equity in it, do feel free to apply for a home equity loan.

These usually come with relatively low interest rates, and that interest is tax-deductible.

Do apply for a personal loan.

If your credit is reasonably good, you may qualify for a personal loan at a lower interest rate that what you are paying on your combined debts.

Do call your credit card company(s) and ask them to give you better terms.

Do get help from a reputable organization for your debt loan.

A good consolidator will not only help you get your debts paid off, they will provide debt management advice and counseling.