Before you apply for a debt consolidation loan, be prepared. Here are the things you need to know:
First, how much debt do you have? If you are applying for a credit card debt consolidation loan, make a list of all of your credit cards. On your list include the name of the credit card, the amount you owe, the minimum payment, and the interest rate. If you are applying to refinance a student loan, write down the amount you owe, and the interest rate you are paying.
Second, prepare a monthly budget. You need to know how much your family earns each month, and what it costs you to live. There is no point in agreeing to a debt consolidation loan where you pay $500 per month, if you can only afford $300 per month. Your budget is very important.
Third, gather all of your paperwork. Your lender will probably want to see a recent pay stub, last year’s tax return (as proof of your income), details of any assets you own (such as a car or house), and recent statements from all of your creditors (such as credit cards and bank loans). Having all of this information when you visit the lender shows that you are prepared, and increases your chances of getting the loan.
Not being prepared is a huge mistake, and significantly reduces your chances of getting the debt consolidation loan. Another element of being prepared is to check your credit report, which we will discuss in our next post.
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