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Student Loans – Types, Eligibility, and More, The Art of Manliness, types of loans.#Types #of #loans

What Every Young Man Should Know About Student Loans

Types of loans

Back-to-school time is once again right around the corner. Millions of recent high school graduates will be heading off to colleges and universities to fill their minds with knowledge and their bellies with ramen. New students are thinking about a lot of things what friends they’ll make, what classes they’ll take, and what it’ll be like being away from home for the first time.

What they’re probably not thinking about, unfortunately, are the loans they’ve likely taken out to pay for the education and experience that awaits them. This aversion is understandable the world of student loans is confusing, overwhelming, and seems disconnected from the present. It’s something you can worry about in 4-6 years, right?

Wrong. Taking the time right now to understand how student loans work will save you money and headaches down the road. So if you’re a young gent (or the parent of one) who’s heading off to college this year or next, we offer this accessible primer on the basics you should know about student loans.

If this info comes too late for you, as you’ve already graduated and are struggling with your student debt, later this week we’ll offer tips for paying it down.

Reduce the Amount You Need to Borrow

Before you consider taking out student loans, it’s financially prudent to find as many ways as possible to reduce the amount you need to borrow in the first place. The less debt you take on now, the less you have to pay back after college. It’s hard to overestimate how much you’ll appreciate even a small reduction in your total debt later on, but trust me, someday you will.

Know that about 2/3 of all college students graduate with student debt, and the average debt is about $30,000. It’s hard for a young man to put that into perspective, but when you’re repaying that loan, the average bill per month is about $320. When combined with other bills and debts, and especially when you get married, it will be a large chunk of your monthly budget. In fact, only about 60% of all student loans are being actively repaid at any given time; this means that just under half of all borrowers can’t afford that monthly payment (and failing to pay has dire consequences which we ll discuss next time). These are just numbers, of course, but are sobering nonetheless, and hopefully give some credence to the reality of student loans and the necessity of reducing them as much as you can.

Save for college. Sure, you’re probably not going to be able to save enough money from your high school job to pay for the entirety of your college education, but every little bit helps. So get out there and get a job. Use some of that money for fun, but be sure to set aside a chunk for school.

If you’re a parent with young children, start thinking ahead by opening up a 529 account with your state to save money for your kid’s future education. Contribute a little bit each month. The money you contribute is taxable, but it grows interest-free. Also consider asking family members to contribute as Christmas and birthday gifts, especially early on when Junior won’t know the difference anyway.

Apply for scholarships. I wish I sought out more scholarships when I was applying for my undergraduate degree. I think I applied for like five, and I ended up getting one for a few hundred dollars. But I had only scratched the surface there are literally thousands of opportunities out there. Don’t just apply for the scholarships that your school offers a lot of organizations have scholarship funds available, and in many cases that money doesn’t even get dispersed because no one ever applies for it. Thanks to the internet, hunting for scholarships is a breeze. Search these sites for scholarship opportunities:

Once you put together a big list of scholarships, dedicate a few hours each weekend to submitting the applications. Sure, it’s tedious and boring, but if you can score a few thousand dollars to go towards your tuition, it’s completely worth it.

“Moneyball” your way through college. Last year AoM guest contributor Jay Cross published an article on how to use CLEP exams to reduce the amount you pay in college tuition. The tests cost just $80 each, but if you pass, you don’t have to take that class in college, saving yourself hundreds or thousands of dollars.

Coupling CLEP exams with taking AP classes (and passing the exam) in high school is another effective way to save big-time money and months of your time. Using a combination of AP exam credit and CLEP exams, I was able to shave off a whole year of college. It was awesome!

Go to a community college the first two years. If you can’t CLEP out of some of your general ed requirements, consider attending a local community college for the first two years of your schooling. Sure, you’re not getting the “full college experience,” but you’ll save a lot of money.

Live at home. My first semester of college I lived in the dorms at OU. It was a blast, but my grades suffered, and it cost me several thousand dollars. At the end of the semester, I decided to transfer to a college in my hometown and move back in with my folks. The tuition was much cheaper, plus I saved a ton of money on living expenses. And as a bonus, I had a 4.0 my second semester.

If it’s an option, consider living with your folks while you’re in college. Sure, they’ll cramp your style some, but you’ll be amazed at how much money you’ll save and how much more productive you’ll be.

Don’t take the full amount of student loans offered you. Before school starts, you’ll get a letter telling you how much in student loans you’ve been approved for. You don’t have to accept the full amount. Take a look at your whole financial situation and decide how much you need to make it through the college year. Many students take the full amount and use what’s left over after tuition and books as spending money. But if you work while you’re going to school, you won’t need to do that. Which brings me to my next point…

Work your way through college. Yes, school should be your top priority. But with efficient use of your time, you can make room for a part-time job. I waited tables and made smoothies throughout college. And most schools offer on-campus jobs that are pretty easy to get, and of course flexible with your class schedule.

Because I had money to pay for my living expenses, I didn’t have to take the full loan amount I was offered each semester. I typically just took enough to cover my tuition and books, and I saved thousands of dollars because of that.

Understand the Two Types of Student Loans

So you’ve done all you can to reduce the amount you need to borrow, but you still have to take on some loans.

Student loans will come in two broad categories: federal student loans and private loans. With federal student loans, the U.S. government is your lender. Thanks to various laws, money lent by the government comes with provisions to help you manage your student debt, such as fixed, relatively low-interest rates, grace periods, and flexible repayment plans.

With private loans, a bank or some other institution is your lender. The company you borrow the money from sets the rules on repayment and they’re not as generous as Uncle Sam.

To help you navigate the various types of student loans out there, we’ve created this handy-dandy chart:

Determining Your Eligibility for Federal Student Loans

To be eligible for any federal student loan, you must meet a few baseline requirements. Most are what you’d expect: graduate high school, be enrolled or accepted to an accredited college, have a valid Social Security Card.

The one eligibility requirement that I didn’t know about and that is unique to men is that you have to be registered with the Selective Service if you’re between the ages of 18 and 25. Uncle Sam won’t give you any loans unless you’re willing to be drafted into World War III.

If you meet the above requirements, then you just need to fill out and submit a Free Application for Federal Student Aid (FAFSA). You can submit applications for the fall semester after January 1. The earlier you submit your FAFSA application, the better. It takes awhile to fill out, so look to set aside about an hour if you’re a first-time applicant.

When Do You Have to Start Paying Back Your Student Loans?

With both federal subsidized and unsubsidized student loans, you’re a given a six-month grace period before you’re required to start paying back your loan. The grace period starts after you gradate, leave school, or drop below half-time enrollment. Just remember, with unsubsidized student loans, you’ll be accruing interest during your grace period and the interest will be added to your total principal. With subsidized loans, the grace period is interest-free.

When it comes to student loans, a little knowledge goes a long way. Do what you can to reduce the amount you borrow, understand the nature of the loans you’re taking, and start thinking now about how you’ll pay them back after you get your sheepskin.

If you’ve already graduated and are having trouble making your loan payment, on Thursday we’ll offer you some tips on paying back that debt.

Bank of India Home Loan Interest Rates 2017 – EMI Calculator online – Deal4loans, bank of baroda home loan.#Bank #of #baroda #home #loan

Bank of India Home Loan Interest Rates 2017 EMI Calculator online

Bank of India Home Loan: BOI Home Loans, Eligibility, Processing Fee, Interest rates 2017, Documents Required Bank of India Housing loan. Current Interest Rates starts from 8.40%.

Bank of India Home Loan Details

The Salient features Benefits Why to choose Bank of India Home Loan Schemes:

✓ To purchase/construct house/flat/renovate/extend/repair existing house/flat.

✓ Maximum loan amount is Rs.3 crores and repayment ranges upto 30 years, with reasonable processing charges. No commitment /administrative charges.

✓ Attractive home loan interest rates according to Available in Industry.

✓ Option for different EMI amounts for different periods during tenure of loan to suit customers repayment capacity.

✓ No prepayment charges under floating rate option

✓ Interest is calculated on daily balance basis which is of great advantage to customer as it results in lower interest amount.

✓ Simplified application form/procedures for convenience of customers, and speedy approvals.

✓ Life Insurance Cover to borrowers for Loan Protection(optional)

✓ Free Personal Accident Insurance cover (Renewed at banks discretion)

Eligibility Criteria for Bank of India Home Loan

Salaried employees, Professionals, Self-employed persons. Requests are also considered from NRIs, PIOs, HUF, and Prop. Firm, Partnership firms and corporate

Latest Interest Rates of Bank of India Home Loans 2017

STAR HOME LOAN SCHEME – Interest Rates are 8.55% for women, 8.60% for others

STAR DIAMOND HOME LOAN Interest Rates are 8.55% for women, 8.60% for others

STAR SMART HOME LOAN Interest Rates are 8.55% for women, 8.60% for others

PRADHAN MANTRI AWAS YOJANA Interest Rates are 8.40% for women others.

Bank of India Home Loan EMI Calculator

Enter your required loan amount, Interest Rates No. of repayment years and click calculate answer in front of you within seconds.

Other Attractive Features

✓ Interest on Daily Reducing Balance Basis

✓ No Pre-Payment Charges on Floating Rate Loans

✓ Facility for step up/ step down EMIs

✓ Inclusion of notional rental income in case of 2nd House and also Employees staying in Staff Quarters;

✓ Inclusion of Income of Close relatives for enhanced loan

✓ Tax Benefit on Interest and Installments repaid in Home Loans

✓ Facility for 100% loan irrespective of stage of construction OR Bridge Loan subject to conditions:

Available Products of Bank of India:

The Different Types of Loans: A Primer, types of loans.#Types #of #loans

The Different Types of Loans: A Primer

The other day a friend of mine asked me about different loan types, as she was on her way to the bank to consolidate some high-interest credit card debt. I was surprised at the seemingly elementary questions she was asking she is an intelligent well-established gal who is pretty good with numbers (the credit card debt is another story).

It made me realize that maybe she is not alone. Although you may know what the various debt vehicles and loan types are, do you know all their inherent characteristics? If you re not sure, here is a loan primer to refresh your knowledge.

Secured vs. Unsecured

All loans, no matter what they are, are either secured or unsecured.

Secured Loans

These are secured (or borrowed) against an asset you own, such as your home, which is offered up as collateral. Ultimately if you default on the loan, the bank will get their money back by way of foreclosing your house (or otherwise seizing the collateral).

The interest rate should be very low (and often negotiable), hovering close to prime rate. The better your credit rating is, the more bargaining power you have with the terms, including loan amount and repayment period.

Payment terms are flexible, and can even be structured as interest-only.

If the loan is secured against the equity in your home, the application process usually involves a drive by appraisal of your home and some legal fees, that together amount to a few hundred (up to a thousand) dollars. As such, it s usually best to apply for a higher loan qualification amount than you think you need (as long as you know yourself well enough not to get into more debt unnecessarily). This way if you wish to borrow more money later on, new appraisals and legal fees can be avoided.

Examples of secured loans:

  • Car loans
  • Boat (and other recreational vehicle) loans
  • Mortgages
  • Home equity loans
  • Home equity lines of credit

Unsecured Loans

These are (as they sound) not secured against any assets. The bank can only utilize collectors (and freeze your accounts) if you default.

The loan amount granted is largely attributable to your credit history and income/assets/debts at the time of application. There is a considerably higher assumption of risk on the bank s part with an unsecured loan. Thus, the interest rate is much higher.

Examples of Unsecured Loans:

  • Personal loans
  • Personal lines of credit
  • Student loans
  • Credit cards/department store cards

Loan Types

There are a few different ways the bank can lend you money.

Line of Credit

Similar to a credit card,you are given a maximum allowable balance, and each month you can borrow as much as you wish from the line of credit up to the maximum.

Monthly minimum payments vary from a percentage (e.g. 3%) of the outstanding balance (as for most unsecured lines of credit), to as little as interest only (as for some secured lines of credit).

You can pay as much as you wish above the minimum payment amount, whenever you wish.

Some lines of credit come with checks, or can be linked to your bank card for debit transactions.

Can be secured or unsecured.

Conventional Loans

Conventions loans include personal loans, home equity loans, car loans, etc.

The repayment terms and amortization is pre-determined and consistent. For example, a $5,000 loan payable over 3 years in equal payments at 8% interest.

You cannot add to this loan without applying for a new loan entirely.

You can usually pay off the loan faster than schedule without penalty.

Monthly minimum payments will often be higher than they would with a Line of Credit, due to the shorter amortization (period of time to pay it back).

Can be secured or unsecured.


Mortgages are always secured loans, with the collateral usually being real estate. They are for large amounts of money, and are payable over long periods of time.

Maximum amortizations (repayment periods) for a mortgage range from 25 to 30 years, depending on where you live.

You can borrow up to a certain percentage of the appraised value of the property, subject to some restrictions and insurance provisions.

Interest terms can be either fixed or variable. Fixed interest locks your rate in for a fixed period, typically five years. Variable interest rates will fluctuate with the prime rate, and have little to no lock-in period.

The penalty to break a fixed rate mortgage mid-term can be outrageous. So if the interest rates go down dramatically, you are stuck with the rate you have until the term (e.g. five years) is up. On the flip side, if the interest rates go up dramatically, your interest rate is protected for the duration of the term.

All the interest is paid up front. In the first few years of having a mortgage, almost all of your payments are comprised of interest, with only a few dollars reducing the principal. It is not until the later years of a mortgage that the reduction of your principal loan amount picks up momentum.

Althoughp you can t always repay as much as you wish, you can usually make additional payments which directly reduce your principal loan amount.

Credit Cards

Known in some circles as the antithesis of all things good and pure, credit cards tend to get a bad rap. Depending on how they are used and abused, they can admittedly be bad news.

You are allocated a maximum balance, with freedom to charge as much or little to it within the limit.

Standard credit cards are always unsecured, so the interest rate is high: usually 9-19% (with the average being closer to 18%)

The minimum payment is usually quite small expressed sometimes as a percentage of the outstanding balance, but in some cases it is little more than just the interest.

Ifyou pay off the balance in full before the due date, you are not usually charged any interest (this depends on the credit card).

Each type of debt serves a specific purpose, although they can be interchanged depending on your situation. The most important thing in managing your debt is to be realistic about what you can handle. Underestimate the amount of money you have to pay towards your debt each month to be safe, in order to avoid getting in too deep.

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Types of loans

Loan for Pensioners, Finance in India, Types of bank loan #1 #hour #loans

#loans for pensioners

Loan for Pensioners

Loans are worthwhile when someone is in immediate need of financial assistance. In earlier days senior citizens were usually deprived of regular loans because of their inability to show proof of a regular income. But the scenario has been changed now and banks are taking care of economical independence of retired individuals by offering a unique pension loan.

Pension loans are of two types. Pensioners loan and Mortgage loan for senior citizen. Through Pensioners loan, a senior citizen can take a loan against their Pension, fixed deposits, National Savings Certificates, Kisan Vikas Patras, Life Insurance Polices and RBI Relief Bonds etc where mortgage loan demands collateral in the form of an asset such as a home or land. The maximum age limit of a pensioner to apply for a loan is 70.

The main advantage of this loan is its low interest rate. The maximum amount of loan avail may varies from bank to bank and depends upon individuals repayment capacity. This loan shall be disbursed through Savings Bank A/c other than the account in which your pension is credited every month. Loan prepayment charges and processing fees are free. These loans can be prepaid any time without any penalty.

Documents required for Pension Loans are:

Proof of Identity ie; Passport Copy or Voters ID Card or Driving License etc.

  • Address Proof ie; Ration card, Telephone or Electricity Bill or Passport Copy etc.
  • Last 6 months Bank Statement or Bank Passbook.
  • Proof of Retirement and the organization last worked for, including the Pension Slip.

  • List of Private Student Loan Companies – 2014 – Private, Consolidation, Direct, Short Term Loans #best #home #loan

    #loan consolidation companies

    List of Private Student Loan Companies 2014

    Be careful when selecting a bank for student loans. They are not all created equal and some are dishonest. Get several loans in writing to compare. This could be the largest purchases you will make in your life.

    Credit Unions offering student loans

    – Advanced Financial FCU

    – Credit Union of New Jersey

    – First Jersey Credit Union

    – Liberty Savings FCU

    – NJ Gateway Federal Credit Union

    – NIH Federal Credit Union

    – Raritan Bay FCU

    – Seaport Federal Credit Union

    – Tri-Co Federal Credit Union

    – United Poles FCU

    Before taking out a loan for college it is important to understand student debt and how it will affect you after graduation. Learn more at Student Debt News.

    Keep in mind all banks use credit scores to determine who is eligible and interest rates. If you or you re parents have a low credit score learn how to repair your credit legally There are companies and attorneys that are specialist in this matter. Or you can do it yourself.

    Some of the largest student loan companies include Sallie Mae and Citi Student Loans (now owned by Discover.)

    State Employees Credit Union – Home equity line of credit #loan #comparison

    #equity loan calculator

    Home Equity Line of Credit

    The Credit Union offers a Home Equity Line of Credit product for primary residences and second homes for members who reside in and for properties located in North Carolina, South Carolina, Virginia, and Georgia.

    A Home Equity Line of Credit is a secured open-end loan that unlocks the value of your home allowing you to borrow against the equity. Advances up to the maximum loan amount may be made repeatedly throughout the 15-year draw period 1. subject to the terms of the account agreement. Once the loan is set up, there is no need to reapply or record a new deed of trust. Advances may be made online in Member Access, through ASK SECU, at your local branch, or by contacting the Contact Center.

    Most interest paid on mortgage loans (first and second mortgages) is deductible on itemized tax returns. The Home Equity Line of Credit is a second mortgage; therefore, you may realize substantial savings by borrowing against your home as opposed to other methods of credit. Check with your tax advisor for specific benefits that may apply to you.

    Obtain a Loan Advance from an Existing Loan 2

    Request a New Home Equity Line of Credit 2

    Instant Cash Advance Online Seems a Preferred Method of Borrowing, says CEO of One of the Lending Companies #student #loan #interest #rate

    #instant cash loan

    Instant online cash advance from proves to be a good option for people who need cash in a hurry as they celebrate their first anniversary with great success.

    (PRWEB) August 09, 2012

    No one wants to incur long-term debt, but another option for borrowing money for emergencies is the instant approval cash advance online. This is a short-term loan for up to $1,000, depending upon the borrower s ability to repay.

    The first step in getting instant cash advance loans is to fill out the payday representative s loan application and return it via e-mail. The representative then finds a lender that fits the borrower s needs and forwards the borrower s loan application to them. Approval takes just seconds and no credit check is done.

    After the representative receives cash advance instant approval, the potential borrower is requested to submit his or her banking information. Then the money is transferred into the borrower s checking account.

    A borrower can use the online instant cash advance for anything he or she chooses, whether it is for the deposit on an apartment, the down payment on a car, for medical expenses or for a much needed get-away with the family. Instant cash advance payday loans makes it possible.

    After two weeks have elapsed, the instant cash advance no credit check lender then deducts the amount of the payday loan, plus the loan fees from the borrower s checking account. The loan fee on a payday loan is usually $15 for every $100 borrowed. If this seems a little bit high, it must be remembered that there is no credit report run on a cash advance instant payday loan. It takes seconds for approval and the loan funds are deposited into the borrower s bank account within a day. A person researching various loans and loan terms would never find the traditional lending market to be so user friendly and fast.

    The requirements for getting a payday loan are few. The borrower must be at least 18 and be a U.S. citizen with a regular job for at least six months, earning at least $1,000 a month in gross income. The borrower may also be on a fixed income, such as Social Security or Workers Compensation, and receiving at least $800 per month in order to qualify for a payday loan. Once a borrower has paid off a payday loan, more loans can be taken out from the same lender in increasing dollar amounts.

    Now people who need cash for an emergency or an unexpectedly high bill have a viable option for their borrowing needs with a cash advance payday loan .

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    Guarantor financial definition of Guarantor #loan #for #business

    #guarantor loans



    A party who will guarantee repayment or performance of a covenant .


    A third party who promises to provide payment on a bond. loan. or other liability in the event of default. While many guarantees apply to debt instruments. they may also be used for day-to-day expenses. For example, a parent may be a guarantor for an adult child and promise to pay rent to a rental agency if the adult child does not do it. Banks often serve as guarantors on behalf of certain clients, but, just as often, private parties serve as guarantors and promise payment on private loans. Guarantors reduce the risk to loans and liabilities, and usually improve the credit agency ratings of bonds.


    If lenders are concerned about your income, your credit history, or other risk factors when you apply for a loan, they may require a guarantor, or cosigner.

    The guarantor signs the loan with you and agrees to pay your debt if you default. For example, lenders may fear that your income may not be high enough to meet your payments if you encounter any unexpected financial setbacks.

    Laws governing who may serve as a guarantor vary from state to state. Some states require that your guarantor be a resident of the state where you’re obtaining the loan, while others will accept guarantors from out of state as well.

    Florida Office of Financial Regulation #interest #loan #calculator

    #payday advance loans

    Payday Lenders (Deferred Presentment Providers)

    A payday lender provides a short-term loan in exchange for a person’s check and a fee. The lender agrees to hold the check for a period of time before depositing it.

    In Florida, the Florida Office of Financial Regulation’s Division of Consumer Finance regulates payday lenders. You can verify a license or file a complaint on the OFR website or call (850) Its Your Money (850-487-9687), if you have additional questions.

    Consumers who take out a payday loan from a licensed lender are entitled to the following protections under Florida law:

    • A borrower may borrow up to $500 per loan.
    • A borrower may only have one outstanding loan at any time. This is tracked through a statewide database of all loans taken out.
    • The maximum fee is 10 percent of the amount borrowed plus a $5.00 verification fee.
    • The loan term cannot exceed 31 days or be less than 7 days.
    • Certain contract terms that limit a borrower’s rights are prohibited.
    • A borrower must pay a previous loan in full and wait 24 hours before entering into another loan. This period is designed to prevent loans from being rolled over into new loans and to give consumers the opportunity to consider other financial alternatives.
    • If at the end of the loan term, the borrower is unable to pay the loan in full, the loan provider must provide a 60-day grace period without additional charge. The grace period is dependent upon the borrower making an appointment with a Consumer Credit Counseling Service within 7 days and completing the counseling within the 60-day grace period.

    Remember, Before You Take Out a Payday Loan:

    • Consider alternative solutions
      • Ask about delaying or making payment arrangements on your non-interest bills such as telephone and utility bills.
      • Talk to a friend or family member about borrowing money.
      • Ask your employer for an advance on your paycheck.
      • Set aside savings each month for future emergencies.
    • Verify a license on the OFR website or by calling (850) Its Your Money (850-487-9687), option 1.
    • Especially be careful to check the license if the payday lender is doing business online. Dealing with unlicensed Internet companies makes it difficult to resolve potential problems, and these companies may be located outside the United States.
    • Be wary of other short-term products that mimic payday loans, such as installment loans, open-ended lines of credit and auto title loans, which may use automated clearing houses or electronic transfer every two weeks.
    • Comparison shop for the lowest fees and penalties.
    • Borrow only what you can afford to pay back.
    • Know when your payment is due and be sure to repay the loan on time and in full.
    • Take advantage of local non-profit organizations across Florida that are available to help you with your financial situation. Many of these organizations offer help with budgeting, credit repair, debt repayment and more. Contact your local consumer credit counseling service, asset building coalition or United Way.
    • Set up a budget. Plan for the future by making a realistic budget to help avoid the need to borrow for emergencies and unforeseen expenses. Free budgeting worksheets are available on

    Four Types of Debt Consolidation Loans #loans #for #people #with #poor #credit

    #debt consolidation loans

    Types of Debt Consolidation Loans

    There are a few different types of loans you can use to consolidate your debt.

    Home Equity Loans

    A home equity loan is a loan that s taken out using the equity in your home as collateral. You typically must have a fair amount of equity in your home and good credit to qualify for a home equity loan. While the interest rates are typically lower than other types of loans, the drawback is that your home is now on the line for your credit card debt. If the payments become unaffordable, you face foreclosure on your home.

    Because of that it s generally not a good idea to use a home equity loan as a debt consolidation loan.

    Credit Card Balance Transfers

    A low interest rate balance transfer involves transferring all your credit card balances onto a single credit card. Low balance transfer interest rates are typically promotional rates that expire after a certain period of time. If you choose this option, make sure you know when the low rate will expire and the interest rate that will go into effect. If you want to use a credit card balance transfer as a debt consolidation loan, you ll need a credit card with a large enough credit limit to hold all your credit card debt.

    Continue Reading Below

    There could be a downside to consolidating debt with a balance transfer – a hit to your credit score. Putting too much debt on one credit card could have a negative impact on your credit score as your credit utilization goes up.

    Personal Loan

    Personal loans can be used as debt consolidation loans. A personal loan is an unsecured loan that has fixed payments over a fixed period of time. Once you re approved for a personal loan, you can use it to consolidate your debts. Depending on your credit rating, you could have trouble getting approved for a personal loan. If you have bad credit you may be approved but at a higher interest rate, or you may not be approved at all.

    Debt Consolidation Loans

    Debt consolidation loans are offered by banks and credit unions for the sole purpose of combining your debts. Debt consolidation loans vary, so it s important that you choose wisely. Debt consolidation loans ideally have a lower interest rate than the rates you re currently paying. They allow you to lower your monthly debt payments by increasing the repayment period.

    Choosing a Debt Consolidation Loan Type

    Know that with a debt consolidation loan, you re not really getting rid of your debt. Instead, you re simply shuffling it around so that it becomes easier to pay. You ll feel like you have less debt and may be tempted to borrow more. Practice discipline and avoid borrowing until after your debt consolidation loan has been completely repaid. Even then, it s important that use good judgment in taking on additional debt.