When you are crunched down with multiple loans and it becomes difficult to manage and pay attention to all debts then it is wise to go for a debt consolidation service. However, there are many questions that come to our mind before we find the best debt consolidation service. How should we find the best service? What should we be looking for and which service will suit us the most? These questions are important as the idea of a one big loan overall minor ones should not on the end become one big worry over minor little worries. So quintessentially there are factors you ought to check and consider before you make any decision. Let us discuss the top five ways to find the best debt consolidation service that can be used by you too.
#1 You should end up paying less money
It sounds as simple as you read it. The best debt consolidation service should scheme a way where you should end up paying less overall money to the service agency as compared to what you would have paid otherwise. Sometimes this may not hold true for everyone as they don’t have sufficient capital for a high monthly instalment and then the best option should be to have lower monthly payment rates. In any case, the amount payable should be less as compared to other plans available to you.
#2 Check out for interest rates
You may be having different loans with a different rate of interests and with a debt consolidation loan you will end up paying a single interest rate to the debt consolidation company. Is this rate of interest high and it will lead you paying more monthly amount? What are the best interest rates offered by other companies? Should you go for a bank or a non-traditional agency? All these factors should be considered and then a comparison should be made. In the pursuit to become debt free soon don’t opt for higher interest rates that will reduce tenure of your payment.
#3 LIC Insurance Policies
Sometimes the best debt consolidation option may not be limited to another debt only. Thinking out of the box there are options where you can sign for an LIC policy which will take care of your all debts and you need to pay a premium towards your policy and a principal amount. In the end, you also get a money-back amount but then make sure to investigate how long you need to pay premiums.
#4 Peer to Peer Lending
Sometimes Peer to Peer lending option can also work well for you. You can contact individual peers via a lending company or a club and then get rid of your multiple loans. Even if you don’t have a decent credit score the Peer to Peer lending can give you a consolidated loan. This is something you can never expect in a traditional loan. Also, the rates of interest are usually less which is something crucial to consider.
There are numerous organizations that offer a debt consolidation loans which are very lucrative in nature. It is your responsibility to check if such agencies are accredited by the reputed bodies like International Association of Professional Debt Arbitrators (IAPDA). This can be dependent on the country you live in. Make sure the agency has good reviews and has existed for a long time. Fraudster agencies may try to scam consumers and make them bankrupt. So it is always advisable to verify the authenticity of the debt consolidation agency.
In the end, the options are not limited to finding the best debt consolidation plan. It can be via a debt consolidation company, peer to peer lending, Home equity line of credit and so on. The ultimate focus should remain on battling out the overall loan amount to the bare minimum.