Getting a free debt consolidation quote is a good step in the direction of consolidating your unsecured debt and having more manageable monthly payments. However, before you begin calling companies, there are several things you should prepare to ensure that you get the most accurate information.
First, you need to decide if your consolidation loan will be secured or unsecured. With a secured loan, your debt is consolidated into a loan that is backed by the equity in your home, vehicle, or some other form of collateral. These loans tend to have lower interest rates than unsecured loans, but they do require good credit. If you opt for an unsecured loan, then a debt consolidation company purchases your loans at a discounted rate and then develops a new loan for you with lower monthly payments and a lower or fixed interest rate. To determine which loan you prefer, you will need to check your credit score and the value of the property or vehicle you can use as collateral.
Next, collect the following information on each of your loans: current interest rate, total balance due, and current monthly payment. Then, develop a budget that includes each of your unsecured loans, plus all other expenses, including house and car payments, utilities, food, transportation, etc. With your budget, try to determine the monthly payment you are shooting for with a consolidation loan. Then, examine your budget to figure out which loans are top priority for a consolidation loan – these may include those with the largest balance, highest interest rate, or highest monthly minimum payment.
Finally, begin researching companies to figure out which ones to call. You may want to begin with the bank that holds your home or auto loan. Choose companies that are well-established and have been in business for several years.
With careful preparation, you can ensure that each debt consolidation quote you receive is based on the most accurate information.