Consolidating your debt is a smart financial move that yields significant benefits. You can make your monthly payments more manageable by consolidating your debt. By snagging a borrower-friendly rate for your debt consolidation loan, you may even be able to save some money. Borrowers who take out debt consolidation loans can also improve their credit scores.
Available options for debt consolidation include signing up for a balance transfer credit card or taking out a debt consolidation loan. Debt consolidation loans offered by lenders such as Symple Lending are more accommodating to borrowers with low credit scores. Those loans are also better for borrowers because they often have lower interest rates.
So, how can you secure a debt consolidation loan? Following the tips in this article should help you obtain the loan you need.
Confirm Your Credit Score
Before you start making plans to consolidate your debt with a new loan, you should first confirm your credit score. Although debt consolidation loans are more accommodating to borrowers with poor credit, lenders still set some thresholds for qualification.
According to MarketWatch, a lender will likely require a credit score of at least 580 to sign off on a debt consolidation loan. You may have some work to do if you haven’t reached that mark yet.
Check Your Available Documents
After confirming that your credit score is good enough for a debt consolidation loan, your next move should involve checking the application documents you have available. You want to do this as soon as possible because lenders may request different requirements. Some of the requirements may not be in your possession just yet.
According to Forbes, common requirements requested by lenders include birth certificates, passports, and state-issued IDs. The lender may also request your pay stubs or tax returns.
You can find out the final list of requirements after speaking to a lender, but it’s still good to know what documents you already have.
Speak to Potential Lenders
With the preparations completed, you can now turn your attention to finding a potential lender. Ideally, a lender should have an experienced debt consolidation agent who can address your questions and concerns.
Ask the agent about the requirements you must submit and the potential loans they can offer. The agent may not present an official offer just yet, but they should be able to provide an idea of what it will look like. You can then decide if that loan offer is good enough.
Complete the Payments With Your Debt Consolidation Loan
Now that you have found and accepted a debt consolidation loan, the last thing you need to do is complete your payments. Whether you have to do this yourself will depend on the lender.
Some lenders may complete the outstanding debt payments on your behalf. Others may send the money to your account so you can complete the payments yourself. One option is more convenient, but both should still work for consolidation purposes.
Confirm that your other loans are completely paid so you can focus solely on your debt consolidation loan.
