Online Debt Consolidation
If you’re struggling with debts, it’s understandable that you might consider a consolidation loan. However, you really need to shop around and make sure you know what’s involved in these types of loan, not just when it comes to the terms and conditions, but also the company itself.
Terms and Interest
In general, the advantages to a consolidation loan are that you have only one monthly bill rather than several, and ideally that you pay a smaller amount in interest each month. However, in many cases, consolidation loans will offer attractive interest rates only for the initial period, after which the rates can shoot up, leaving you in a worse position financially, so make sure you’ve checked the terms thoroughly.
The terms may be well hidden when you purchase a loan online so take the time to locate them and know exactly what you’re getting into if you do this. Also bear in mind that if a company is trying to hide the conditions or make them difficult to understand, that this is not a good sign.
It should go without saying that you should only accept credit from a reputable company, otherwise you may find yourself in a much worse situation than you are when you take the loan out.
Making sure a company is reputable is doubly different when the company operates online, not least because you have no physical connection to the company. It’s far easier for disreputable people to hide their real motives when they operate online, and as a result there are innumerable debt and credit scams operating across the Web.
When choosing a company to try to obtain a consolidation loan from, do as much research as you possibly can. Find out whatever information about the company that you can, from independent people, particularly people who may have used them in the past.
What’s the catch?
Bear in mind that if a deal looks attractive at first glance, there is bound to be a catch somewhere, after all, these companies make their money by giving people loans involving huge amounts of interest.
What are your options?
If you’re considering an online debt consolidation loan, the chances are your finances are possibly not in the best shape, and likewise for your credit rating. Bear in mind that at best a consolidation loan means paying the debt to someone different, and at worst can land you in even more difficulty.
Where possible, you should really only seek lending from a company that you can speak to directly, on the telephone if not in person. Remember that companies are generally not going to want to give you borrowing unless there’s something in it for them, so if your credit rating is poor, the chances are they’re taking advantage of this to gain the most amount of interest from you.
Before taking any decisions about any consolidation loan, you can get advice from the Citizens Advice Bureau or from the National Debtline. Both of these bodies will give you advice for free and may save you a lot of stress as well as money if you consult them first.