The economic recession highlighted the fact that the average American has quite a bit of credit card debt and was struggling to repay the amount of debt balance.
There are ways to get out of the credit card debt rut and one of the most effective ways is through debt consolidation.
Under debt consolidation, a debtor who has a number of unsecured debts can consolidate it all into a single loan at a lowered rate of interest.
There are a few criteria to keep in mind while applying for a debt consolidation loan.
It goes without saying that a debt consolidation loan will only be granted to you if you are over 18 years of age.
In order to qualify for the debt consolidation loan, you also need to furnish substantiation that you have a steady source of income and are in a position to make repayment on the loan.
You need to provide evidence of employment for at least 90 days prior to applying for a consolidation loan.
Another factor that the banks and credit organizations consider at the time of granting you the loan is the condition of your credit score.
Most lenders require you to have a minimum credit score before they agree to provide a loan.
If you have a decent credit score, you should not hesitate to ask the creditors for a quotation to get the best rates and terms of offer.
This is not a primary requirement to be granted a consolidation loan and even people without a good credit score have been granted consolidation loans.
However, the credit score could play a vital role while deciding the final rate of interest and the total amount of money that you are allowed to borrow after they study your income levels and history of employment.
Make sure that you have a clear idea on what is the requirement for the loan.
You need to decide on the lowest sum to borrow after studying the total debt, the interest rates that are being charged, the benefits offered by the consolidation loan, the repayment schedules for the new loan etc.
Check and compare rates that are available and that best suit your requirement.