Content

• Steps

If done right, consolidating loans could save you. You can consolidate loans by merging all your small loans into one larger loan. To do this, you need to find a loan consolidation that has a low interest rate and a reasonable term. You can consolidate your existing personal loan or credit card balance transfer. Particularly for student loans, you will have many other options when merging

Steps

Method 1 of 3: Find personal consolidation loan

1. 

   Make a list of your debts. You can't decide which option is better until you know how much you owe. Find all the debts you want to consolidate and create a list with the following information:
   • Due debts are paid
   • Your monthly payment
   • The interest rate of the loan
   • Loan collateral (secured loan on the property, for example, you use your car to secure a car loan)

2. 

   
   
   Check credit history. Lenders will only lend if they believe you can repay them. Find a free copy of your credit report and a copy of your credit score. In general, to be able to consolidate your personal loan, your credit score must reach a fixed amount (about 600).
   • Your credit score may be deducted if your credit report is in error. Therefore you must carefully check the report and complain if there is any false information. For example, the account listed is not yours, or the account is listed incorrectly as in default.
   • If your credit score is too low, you will have to wait until you reach the required level for a loan consolidation. You can pay off your debt and improve your credit score first.

3. 

   
   
   Search for consolidated loans. There are many lenders that offer this type of loan. In fact, you can get many loan offers in the mail. You can ask your bank or credit union for a personal consolidated loan. You can also search for lenders online. Note considering the following:
   • Do not use secured loans to consolidate unsecured loans. For example, a lender might say, "Yes, we will give you a $ 20,000 consolidated loan, but we want you to use your home as collateral." If you don't pay your loan on time, your lender can take out collateral.
   • Pay attention to both the interest rate and the repayment period. Don't just focus on monthly payments.
   • Learn carefully online lenders. Lenders must have the actual address listed on their website and use encryption when you submit information. If in the United States, you can check with the Better Business Bureau when there is a complaint.

4. 

   
   
   Check your preferences. Loan consolidation can save you two ways - it can reduce your monthly payments or you can reduce your total payments. Some loans will have both of these priorities, but some loans have only one of the two priorities above.
   • For example, you can find a consolidation loan to cut your monthly payment in half by extending your repayment period up to 20 years. As such, you will have to repay the loan for a longer period than the loan cycle.
   • However, in some cases, you can only focus on cutting down on monthly payments. For example, you could lose your job. In the meantime, a lower monthly payment will make it easier for you to breathe, and you can refinance on that consolidated loan later.

5. 

   Loan registration. Contact lender and provide all required documents. You will need to provide a variety of information, such as ID, proof of income, and information about the employer you work for.

6. 

   Pay smaller debts. Once approved, the lender will probably send you a check. Do not use this check to shop! You will need to use this money to pay off smaller loans. Pay on time and then commit to repay your consolidated loan.

7. 

   Consider other options. Loan consolidation may not be necessary or the best option for you. For example, if you've been in trouble lately, you can explore other options. Consider the following:
   • You can call your creditors and ask if they can offer you several payments until you can repay the loan. You must have a good reason, like losing your job or being sick. Also, you must assure your lender that your problem is only temporary.
   • You can consult with your credit counselor and a debt management plan. Counselors can negotiate with your creditors to lower interest rates and waive late payment penalties and fines. You will transfer money to the counselor so that they can pay for each creditor.
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Method 2 of 3: Use a balance transfer method

1. 

   Check if you are eligible for a card balance transfer. Many credit cards have a low credit card interest rate per year APR for 12-18 months if you deposit your balance. In general, you need a fairly high credit score to be eligible for a balance transfer - usually above 700 points. When transferring your balance, you may only incur a small transfer fee, about 4% of the amount transferred.
   • You can search the internet for credit card balance transfer offers. For those of you living in the US, you can visit websites like NerdWallet or Credit.com to compare offers.
   • Maybe you already have a credit card with a balance transfer. Please check your credit report again.

2. 

   Avoid transferring too large amounts. You will only benefit if you can pay off your debt before the 0% APR period ends. If you fail to pay off your debt before this deadline, interest rates will go up, usually above 15%, which costs you a lot of money.
   • The interest rate on personal loans will be 15% lower, so avoid using this balance transfer if you cannot pay off your debt early.

3. 

   Complete the balance transfer. The transfer is very easy. Just tell the credit card company the number of the account you want to transfer and the amount you want to transfer. This amount will show up on your next credit report.

4. 

   Pay bills on time. The 0% APR rate is only good if you pay in full and on time every month. Otherwise, you will no longer be entitled to this interest rate and may have to pay penalties and fees at a much higher rate. If needed, you should also set up a payment reminder. For example, many credit card companies will send a text or email reminder.
   • You'll have an easier billing period if you create a budget and stop spending. Some people spend more because they find that their monthly payment is quite low. Stay away from this thought.
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Method 3 of 3: Consolidation of Student Loans

1. 

   List your student loans. Make a list of all your monthly loans using the following information:
   • Lender
   • Debt amount
   • Monthly payment amount
   • Payment term
   • The loan is public or private

2. 

   Determine your goals. It is common to consolidate student loans for a variety of reasons, and the reason for the consolidation affects the way a loan is consolidated. Consider the following:
   • You want to consolidate loans because you get overwhelmed with too many papers. In this case, you can consolidate some loans through the Department of Education, and your interest rate will not drop. Instead, the new loan consolidation will be the average of the interest rates for all of your loans.
   • You want lower interest rates. You will need to merge with your private lender. A lower interest rate will help reduce the amount you have to pay each month, while also reducing the amount you are due over the life of the loan (unless the loan term is longer).
   • You want lower monthly payments. Generally in this case you should merge with a private lender. However, if you merge with the Department of Education, you can look for an income-based repayment plan or extend repayment periods, both of which help to reduce monthly payments.

3. 

   Find private lenders. In the US, there are a number of popular private lenders such as SoFi, CommonBond, and Citizens Bank. Usually, you must have a credit score of 600, so try to increase your credit score.
   • Check the interest rate of each lender. For fixed interest rates, interest rates range from 2-9%. For variable interest rates, the initial interest rate figure may be below this threshold, but then this number may rise sharply in the future.

4. 

   Make a question. There are plenty of people who can help you decide which one to incorporate is right for you. You can talk to your current lender and discuss your options. Consider asking the following questions:
   • "Are all my loans eligible for consolidation?" Most public loans can be consolidated with the Ministry of Education. However, private lenders often have their own rules.
   • “If I consolidate my loan with the Department of Education, will I lose anything?” For example, you could lose all the credits you have earned if your loan is currently being repaid. based on income.
   • "Can I consolidate if my loans are not being repaid on time?"

5. 

   Registration. Collect student loan information. If you are applying for a private loan, you need information about your financial history: work history, current income, education background, etc.
   • For those of you who live in the US, to merge with the Department of Education visit www.studentloans.gov and use your Federal Student Aid ID to log in. You need to choose a loan to consolidate and select an employee. You can also choose a repayment plan, lasting 10-30 years, or choose an income-based repayment plan.
   • To register with a private lender, you need to provide information about your financial background and student loans. The lender will make a decision based on this information and your credit history.

6. 

   Consider other options. Your financial difficulties may be temporary. If so, consider many other options that may help you breathe easier in the meantime. There's no reason to consolidate a loan if you don't need it.
   • You can look for ways to postpone repayments, so that you can suspend state loan payments for a period of time. Contact your lender.
   • You may also be eligible to have an income-based debt repayment plan on public loans. You can choose this plan after the merger, or even if it is not necessary. For this plan, you may only need to pay 1-2% of your after tax income. You can pay more as your income goes up.
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