Digital News Report – This time of year is busy for banks as borrowers seek debt consolidation loans after the holidays. Travel expenses, gifts and other purchases may be accumulating interest due.
The larger the outstanding debt on credit cards, student loans, and auto loans, the more customers can potentially save with a debt consolidation loan.
Most banks want collateral when the loan amount exceeds $5,000 or $10,000.
Citibank has a current program to consolidate unsecured debt up to $7,000 with terms ranging from 12 to 60 months. There is no-pre-payment penalty so if the borrower opts for the 60 month term they can pay extra each month to reduce their cost.
Customers with a bad credit score will pay more in interest. In some cases, especially with unsecured loans, the financing will be difficult to qualify for. It helps to be a customer of the bank and be in good standing with the bank you are doing business with.
Citibank says that they can offer an instant online decision. Borrowers can change their mind within 14-days of signing without any charge.
The Debt Consolidation Care blog says that borrowers should seek a debt consolidation loan when they are having trouble paying multiple bills. If you cannot “stay current on your bill payments”, you might want to consider a debt consolidation loan.
The goal is to lower the monthly payments and to pay the loan off with less interest. In some instances the loan will be paid off quicker.
By Tina Brown