Second, you may be able to set up a consolidation loan that lets you pay off your debt over a longer time than your current creditors will allow, so you can make smaller payments each month.That's particularly helpful if you can combine it with a lower interest rate as well. Basically, you borrow a single, lump sum of cash that's used to pay off all your other debts.Once the introductory period expires, the rate you’ll see on a balance transfer card is usually higher than on a personal loan.
That’s because, whether or not you qualify for a personal loan will depend upon your creditworthiness.
With a debt consolidation loan, a lender issues a single personal loan that you use to pay off other debts, such as balances on high-interest credit cards.
You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years.
There is a right way and a wrong way to roll your credit cards or auto loans into your mortgage.
First, the wrong way – if you simply get a larger mortgage and spread out your payments on your 3 year old car for 30 years, you are probably making a mistake. Are they from a specific event or cause, such as a medical emergency, or are they a result of a lifestyle that consistently out-spent your income?
From there you’ll need to get together the necessary paperwork and apply for that loan.