With changing and developing living conditions, credit opportunities have developed. Now people know better about managing their loans and pay more attention to their credit score. This made my credit area easier. It is also possible to consolidate your credits into a single loan by purchasing consolidate loans. However, consolidate loans are often confused with the use of balance transfer. They are both similar and different. Sometimes you can use it together.
Consolidate loans help you save time when used correctly. However, first of all, it is necessary to know what consolidate loans mean. If you have more than one credit available and you want to collect under one credit, these are called consolidate loans. Here you have to pay attention to have a reasonable maturity and low interest rates. Otherwise, using consolidate loans will not save you money and may even be negative.
Using balance transfers is also like consolidate loans. However, the transfer of balance is done through credit cards. Credit card debt is managed through a single credit card. Promotional credit cards with 0% interest are generally used for this situation. Thus, debts are paid without interest rate problemand the person saves.
Stages of realization of consolidate loans
- The first thing you need to do to make consolidate loans are to create a list of your debts.
In this way, you collect all the debts you wish to receive a consolidate loan and determine the amount to be paid. You will also have an idea of your monthly payment and debt interest rate. You must decide whether the loan will be collateralized or without collateral.
- The second thing you need to do in order to realize consolidate loans is checking your credit history.
The most important thing for lenders or creditors is to make sure that you make a refund. Therefore, you will need to receive your credit reports and credit scores. Generally, it is necessary to have around 650 credit scores in order to receive consolidate loans. The higher your credit score, the easier it will be for you to take consolidate loans. Therefore, review your credit reports and discuss them with credit agencies if there are any errors. This will increase your credit score. If your credit score is too low, you must wait to receive consolidate loans. Make the necessary payments first and raise your credit score.
- The third thing you need to know to perform consolidate loans is research consolidate loans.
Many lenders offer this. It is possible to come across your mails. You can request a personal consolidated loan from the credit union or your bank, or contact online lenders. However, in this stage that you perform in order to receive consolidate loans, you should pay attention to the following;
1- If you want to combine your unsecured loans, do not take secured loans.
2- Do not think only as monthly payment. Also note the maturities and interest rates of consolidate loans.
3- If you are going to get online help, you should pay attention to the site you will use. They must use encryption when providing information.
- The fourth thing you need to do to make consolidate loans is to set your priority.
When you receive consolidate loans, you can either reduce your monthly payments or reduce the total amount you’ll pay back. However, you cannot do both together. For the monthly amount to decrease, the term must be extended and the longer the term, the higher the total amount you will pay.
- The fifth thing you need to do to realize consolidate loans is to apply for the loan.
You must create the necessary documents and conditions before applying for a loan. You must provide many things about your proof of income, your personal information, and your employer information.
- The last thing you need to do to make consolidate loans is to pay your small loans.
Usually the lender issues a check after the consolidate loan is approved. Instead of making arbitrary expenses with this check, pay your small debts and undertake to pay your consolidate loan.
Getting consolidate loans is a convenient way to pay your debts, but if the conditions don’t suit you, you can use different methods to save money; Student consolidate loans and using a balance transfer. Student consolidate loans are different from others. Federal student loans can often turn into consolidate loans, but in private student loans lenders may have set their own rules. You can try to deferment student loans before converting them to consolidate loans.
Can consolidate loans and using a balance transfer be used together?
If you have more than one credit card and you want to get rid of your debts at once, you can use consolidate loans and balance transfers together. To do this, you must either have a low interest credit card or have promotional credit cards with a 0% interest rate. So you can save even more. First, transfer your credit card debts using a balance transfer. Then use consolidate loans to repay your new credit card debt. So you can get rid of your credit card debts at once. Another contribution of this situation will be to increase your credit score. By using consolidate loans, you will reduce your debt utilization rate and your loan will be more guaranteed to pay. The most important issue for lenders or creditors is the payment of debts.