Learn How to Get a Loan for Debt Consolidation in a Few Steps
                     L E A R N H O  W T O G  E TA  L 
O  A N F O  R D E B T
C  O  N S O  L I D A T I O  N I N A  
F E W S T E P S
B Y L E V E L F I N A N C  I N 
G

When managing your current debt obligations becomes 
 challenging, debt consolidation is one way to make 
your  life easier. This term refers to the action of taking 
out a  new loan to merge multiple debts into one.
The main advantage usually lies in the new loan’s better  
borrowing conditions compared to your current ones. 
This  means a lower interest rate or a more extended  
repayment period, or both. As a result, you will make only 
 one monthly payment for a lower amount than what you  
are currently paying on your existing debt.
Debt consolidation is not the same procedure as debt  
resolution and debt management. The former refers to  
hiring a debt settlement company or an attorney to  
negotiate a reduction in the principal you owe. The latter 
 aims to make your monthly payment (or payments) 
lighter  by negotiating a reduction in your interest rate or 
fees.
This article will give you some helpful tips on how to get 
a  loan for debt consolidation, as well as explain the  
technical aspects of this process.
Let’s assume that you are currently making four 
different  payments on your multiple debts, which are:
first credit card  
second credit 
card  student loan
car loan
Here are your balances, interest rates, and 
monthly  payments for each debt obligation.
What if you consolidated these obligations by taking out 
a  60-month loan with the following conditions?
A total loan amount of 
$36,800.  A 10% interest rate.
In this scenario, you would have to make only one monthly  
payment of $782, a considerably lower sum than what you  
are paying now! On top of that, you would be debt-free in 5 
 years, a shorter time than the period you need to repay 
your  current student loan.
With the same method, you can consolidate 
various  federal loans. These include:
Direct student loans (both subsidized 
and  unsubsidized)
Federal Stafford loans (both subsidized 
and  unsubsidized)
Direct PLUS loans
SLS  (Supplemental Loans for 
Students)  Health Education 
Assistance Loans
Unsecured personal loans don’t require collateral, 
meaning  you won’t risk losing your house or other assets 
if you  can’t repay your creditor. However, unsecured 
personal  loan providers ask for more checks on your 
financial  situation. Here are some of the factors lenders 
look at  when evaluating your unsecured personal loan 
application:
your employment situation 
 your debt-to-income 
ratio  your FICO score
If you have poor credit or your debt and income 
situation  discourages lenders from accepting your 
unsecured loan  application, you can resort to secured 
personal loans.
These instruments allow you to give sufficient guarantees 
to  lenders by using an asset or a certain sum of cash as  
collateral. If you can’t pay the loan back, the lender will 
take  control of your collateral.
A secured loan can be a clever way to consolidate 
your  current debt if you have assets that you are 
willing to  sacrifice in the worst-case scenario.
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