Blogging Away Debt Our Journeys to a Debt-Free Life

by Admin

As the economy always seems to be in a state of fluctuation, chances are, like almost every other American, you will need to take out a personal loan to fund an event or to consolidate your outstanding debt.

The question then becomes, how do you make this process as efficient and painless as possible? You don’t want to spend hours on end searching and comparing the many different options. It is in this capacity that a site such as consolidate.loan comes into play – they do the bulk of the work in locating a viable option for you. Below, we’ll see some of the things you can do to facilitate the process.

Are You Looking for a Personal Loan or an Auto Loan?

The above two are just examples; of course this process extends to all other kinds of loans. The point is to determine which one you’re looking for. The primary difference between the available types of loan is whether they are secured or unsecured debt. Your ability to obtain an unsecured loan is dependent on your credit history; if it isn’t very good when compared to the average borrower, then you may have many more options for secured loan and the collateral that’s often required.

Basically, then, an unsecured loan is based mostly on your credit score. A secured loan tends to be for people with low credit scores, and requires you to put up something of value – jewelry, car, home, boat, etc.

Order Your Credit Reports

You need to know your credit score and elements of your credit history; these are what your lender will use to determine the interest rate of the loan he or she gives you. Generally, the interest rates you’ve been able to get for your multiple credit cards is a good indicator; but you still want to get your free (once a year) credit report so you can check for any discrepancies that can be fixed to improve your profile.

One of the primary benefits of pulling your credit report before applying for a consolidation or any other loan is this: if your application is denied, this is reported to credit agencies. The rejection has an adverse reaction to your score and can lower it some points. So, if you know you have bad credit, then it may be best not to go for an unsecured loan in the first place – wait a few months, improve your score by paying the bills on time, and try again later. Or, only pursue a secured loan where you will put up a collateral.