For most people with debt problems, the first alternative to bankruptcy they consider is a debt consolidation loan. That makes sense, because with a debt consolidation loan you can pay off all of your debts and only have to worry about one loan payment each month. In most cases your new loan will have a lower interest rate than what you were paying on all of your high interest credit cards, so you save money.
But do you qualify for a loan? That will depend on a number of factors, including your income, and the amount of your debt. To find out if you qualify, use a debt consolidation loan calculator to calculate your loan payments. You enter the amount you owe now, and the interest rate you are paying, and you enter the amount you will be borrowing, and the new interest rate you hope to get, and you can instantly see how much you will save.
It pays to be prepared before you go to the bank, because if you won’t qualify you need to take steps to increase your chances of qualifying for a loan. You may need to pay off one or more of your credit cards first, or take steps to increase your income.
Either way, you want to know whether or not you can afford the loan before you apply, and that’s why it’s essential that you use a debt consolidation loan calculator to calculate your payments first.
Posted by Editor Bankruptcy Alternatives @ 12:48 pm