If you need to do debt consolidation to properly manage multiple debts, you can easily find online lenders to help you out. However, if you want to do it with a bank, that’s also possible especially when you have an existing relationship with a local bank.
So how do you find which banks offer the best debt consolidation programs:
APR or annual percentage rate is different from your interest rate. They’re linked but not the same. Your APR is a combo of your interest rate and your origination fee. So, for example, if you are seeking for a $10,000 loan, it will be difficult to compare different lenders if you will base it on interest rates and origination fees. It’s like comparing oranges and apples. However, if you know the APR, you will be able to easily see what’s OK and not.
The APR will also vary depending on your credit. So, take that into consideration when shopping for a debt consolidation package.
If you can find a list of which banks offer the best debt consolidation, and you have a bank that does not have origination fees, then go with that bank. Remember, origination fees will be the biggest chunk that will determine how the payments will be easy (or not) for you.
It might be quite challenging to find banks without origination fees so just go for the best option.
Fixed Interest Rates
When you are doing debt consolidation, you want something that’s predictable so you do not have to deal with any surprises. A fixed interest rate will be a good thing to consider if you are looking for a debt consolidation loan.
Good Range of Loan Amounts
Whether you are looking to consolidate a few thousand dollars of debt or something that’s bigger, having a lender that gives you a good range of loanable amount is always good. However, this is not the deciding factor as everything will still depend on you ability to pay back and your income.
Most lenders will have hidden fees. You have to face that reality. You have to determine which ones offer reasonable fees and which banks do not try to hide these fees in the fine print.
You have to deal with late payment fees, which are actually reasonable ones since you’re borrowing money and you have to be responsible enough to pay on time.
Then you have prepayment fees. Funny as it may sound, lenders can charge you for paying up earlier than expected. They do this because they lose the interest they can earn when you pay them back before a predetermined schedule.
If you want to pay using checks, then expect some processing fees to come on top of your other fees.
Show You Options Without Hurting Your Credit
When you shop for loans, you can get several dings on your credit score when lenders pull up your information. If you can find a lender that will tell you the interest rates that you have to deal with without pulling your credit score down further, then add that lender to your short list.
Not all Debt Consolidation Programs are made equal. Check out which banks offer the best debt consolidation programs and see what best fits your needs.