Are you receiving collection letters and calls from creditors? If you answered yes, you may want to consider a low interest debt consolidation loan. Likewise, if you are barely meeting your required payments and facing serious financial trouble in the near future, you may also want to consider a low interest debt consolidation loan. Prevent the letters and calls before they start. Since you are already paying a high rate of interest on your credit cards the key to a debt consolidation loan working for you is to find a low interest rate. Whether your existing debt is from credit cards, personal loans or even business debt, low interest debt consolidation may or may not be the best solution. Low interest debt consolidation may sound like the solution you need, but there are disadvantages to be considered.
Do not jump too quickly, though. You must keep in mind that the low interest debt consolidation loan carries with it a rather lengthy repayment duration. With this in mind, low interest debt consolidation may not actually save you money in the end. If you still believe a low interest debt consolidation loan is your best solution you must understand that you will be committed to the monthly repayment amount for a substantially period of time. It may be a better financial solution to try negotiating with your creditors on your own. You could possibly reduce the interest rate on that credit account providing you with a similar low interest rate you would receive with a low interest debt consolidation loan, while avoiding the commitment to such a long repayment term. This is a good alternative solution to consider before taking out that consolidation loan.
Some debt solutions include securing a consolidation loan with some type of asset, specifically your home or property. You should never use your home to secure a low interest debt consolidation loan. The result would be your unsecured debt, such as credit cards, converting into secured debt which is something that should be avoided. You do not want to risk losing your home.
On a final note, if your inability to stick to a budget is a factor that has put you in the financial situation you are in a low interest debt consolidation loan is probably not the best solution for your problems. Such a loan requires financial commitment to repayment plan for a long time. There are many services available for those facing financial crisis and a large amount of debt. Many debt consolidation companies provide free debt counseling, credit repair assistance and money management education and advice.