Digital News Report – Debt consolidation loans can benefit people who want to combine and replace several outstanding loans with one loan. The goal is to lower the payments, the interest rates and provide the customer with one easy payment.
There are two basic ways to consolidate the loan: secured and unsecured. Borrowers can acquire a secured loan using a car, boat, bike or home as collateral. Unsecured loans do not require any collateral but may come with a higher interest rate.
Several major banks offer unsecured debt-consolidation loans including Citibank and Wells Fargo. As credit card rates increase to 18 percent or more, debt consolidation has become very popular.
First Command Bank
First Command Bank says that customers can combine high interest-rate loans into one low interest-rate consolidation loan. The interest rate will vary depending on your credit score.
The bank can consolidate up to $25,000 in debt with one loan. The payments can be made over a 60 month period (term). The payoff-rate can be much quicker and cheaper than making payments on credit cards.
The bank does not specify an APR because that rate will depend on credit score, but their interest rate will likely be lower than what you are paying on credit cards. More money will be applied to the principal helping cut down the term of the loan.
“There’s no home equity or collateral requirement, no application fee, no monthly service fee and no closing costs”, the bank said in a statement.
By: Tina Brown