Will You Get a Better Loan Rate with Debt Consolidation?

If you have a huge amount of debt and think that getting your bills consolidated is the only answer, you may be wrong. Many times people are frantic to lower their monthly payments through bill consolidation, believing that they will be quoted and awarded the lowest interest rate available. That is where many people go wrong. Debt consolidation loan rates can vary from person to person as well as by company to company and can sometimes be a significantly higher loan rate than if you had not chosen to consolidate your bills.

The way debt consolidation works is you first make an appointment with a credit counselor. They will ask you to bring in a compilation of your mounting bills as well as any credit cards you have that have contributed to your debt. Once you meet with your counselor they will go over the best option for you concerning your debt consolidation. They may recommend consolidating all of your credit card debt, or they may advise that it would be wiser to compile a smaller amount of debt to consolidate, depending on how low your existing loan rate is. Once you have made the decision about which direction you would like to go with your debt consolidation, your counselor will then work with your creditors to try and get the lowest interest rates possible for you. Once they have agreed upon a particular loan rate, the counselor will average them all out and will give you the final interest rate and monthly payment you can expect to pay every month. It is crucial that you do not get an adjustable rate quote as it is quite possible to have your rates and payment increase rapidly, finding yourself in the same financial predicament as you were in before. Do not sign on the dotted line until you are confident that you have been quoted the best and lowest debt consolidation loan rates. If you are not confident that you have found the lowest rates, you are perfectly within your right to commence to searching for another loan consolidation agency who may be able to provide you with a better loan rate.