If you have been making some bad money decisions and have now found yourself in a lot of debt it may seem like there is no light at the end of the tunnel. Fortunately, there is help available, including getting a loan. To help you climb out of the tunnel, listed below are two types of loans that are available..
Debt Consolidation Loan
With a debt consolidation loan you will borrow enough money to pay off each creditor that you owe money to. Once you are approved for the money the lender will set up one monthly payment for the loan. This can save you a lot of time as you will not have to worry about paying a bunch of creditors each month, but instead can make one payment.
You can get a consolidation loan through your bank. You can also get one through companies that offer debt relief loans. If you own your own home, you can get a home equity loan.
If you pay a high interest rate on the debt you have now and get a lower interest rate on your consolidation loan, you will save money in the long run.
If you do not want to get a debt consolidation loan, you can get a personal loan. Make sure you borrow enough money to cover all the debt, however. First, contact each creditor and ask them how much debt you have with each of them. This will give you the total that you need.
A personal loan is known as unsecured loan. This is because you do not have to put up any kind of collateral in order to get the loan. When setting up the loan you will choose how long you want to pay it off and the lender will determine what your payment is. One benefit is the payments are fixed, which means the payment will stay the same amount during the entire length of the loan.
The only drawback to a personal loan is that you need to have a good credit rating in order to get a loan with a low interest rate. If you have poor credit, you could still likely get a loan but the interest rate would be very high. In a case like this, you would end up paying more money for your debt.
Talk with a lender in your area to learn about more types of loans you can apply for to pay off your debt.