Finding the right debt consolidation lender is important if you want to get out of debt completely. Using a debt consolidation loan is an effective strategy to solve a difficult credit situation. It involves borrowing an amount that can pay off your multiple credit accounts. The idea is to lower your interest rates and make your repayment plan more simple. This change should be able to make the debt relief process easier to complete – so debt freedom is easier to achieve.
Apparently, this quality of debt consolidation is appealing to a lot of debt-ridden individuals. According to reports, the number 1 reason why people borrow a personal loan is to use it in debt consolidation. Although there are several ways to consolidate debt, people have chosen to borrow a loan as the perfect strategy.
While this is great, a lot of people might be skipping on one important step as they begin their debt consolidation journey. Some people breeze through the process of choosing the right debt consolidation lender – which is a huge mistake.
Signs you should consider another debt consolidation lender
The truth is, there are a lot of options to borrow money to consolidate debt. There are a lot of online lenders that can easily approve your loan application – and admittedly, not all of them are legitimate. In fact, you need to be more cautious of those that seem convenient and too-good-to-be-true.
This is why you need to know the signs that you are submitting an application with the wrong debt consolidation lender. It is the best way to start your journey of consolidating debt successfully. Here are the warning signs that should tell you to skip a lender and move on to the next one.
They have a lot of customer complaints
Sometimes, the best way to get to know a company is by looking at the feedback from previous clients. But you should not look at the ones posted on their website. Go to authority review sites like Consumer Affairs, Better Business Bureau, Trustpilot, etc. Search the lender and see what previous clients have to say about them. Make sure to spend a considerable amount of time reading through the feedback. And do not just focus on the positive. Look at the negative reviews as well. This will give you an idea about the work ethics of the debt consolidation lender you want to borrow from. If they are getting a lot of negative reviews, then you need to go look for another lender.
The approval is taking so long
Most of the time, the approval will take a few days to complete – but there are times when it is faster. If the debt consolidation lender is taking a very long time to provide you with an approval, it is one of two things – you are not approved or they are not legitimate. Give them a call to ask what is taking so long. If they cannot give you a straight answer, pull out your application and find another lender.
There are suddenly a lot of fees
A great debt consolidation lender will always be upfront with you. If there are charges and fees that you need to pay to get the debt consolidation loan, you need to be made aware of that before you sign an application. That way, you can decide if you want to pay for all the fees. If not, then you can go to another lender to make an inquiry. Besides if they keep it from you, that is a sign that they are not being truthful with you. It makes their trustworthiness questionable.
They are being shady about the terms and conditions
Admittedly a lot of people say that they do not read the terms and conditions. In one survey, more than half of the respondents said that they find the documents time-consuming. Maybe this is why a lot of people skip reading it or just skin through it without understanding it completely. Well, this is a mistake. You need to read the terms and conditions and understand it completely before you proceed with the loan application. And if you have questions that the lender does not want to answer, that should raise a warning in your head. They should be willing to explain everything to you and make you understand the loan.
They are forcing you to borrow more
Obviously, the more you borrow, the more the debt consolidation lender will profit from the transaction. This is why they will try to convince you to borrow more. There are people who are qualified to borrow a lot more than what they need. The lender will probably offer a lower interest rate or better terms. But do not give in. Borrow only what you need. That way, you will not make your debt balance grow any further. If they insist, go find another lender.
How to spot the right debt consolidation lender
When you create a debt consolidation plan, make sure it includes the lender. You need to know what to look for in a debt consolidation lender. That way, the search will be easier and faster too. You can easily filter through the options that you have.
But beyond that, there are tips that you can use to help you find the right lender that will help you consolidate your multiple debts.
Consider at least 3 lenders
First of all, make sure you consider at least 3 lenders. Compare them thoroughly – the terms, interest rates, customer satisfaction rating. Look at everything as you make your comparison. The more lenders you can find, the better it will be. There might be qualities in one lender that the other does not have. You might not realize that you wanted that if you do not widen your options.
Conduct your own due diligence
Once you have found the lenders you will compare, make sure to dig thoroughly. Look at customer reviews and complaints. Take a look at the financial products they offer. Check the qualities that will make the debt consolidation program easier for you. Make sure to check out their customer support. You want to ensure that they can easily be reached if you encounter problems or you want to change something about your repayment plan.
Do your research
Finally, make sure you do your research – and not just about the debt consolidation lender. You have to know your rights. That way, if you talk to your chosen lender, you will know what to say. You can identify if they are making false promises. It is possible for you to negotiate the debt consolidation loan you will borrow and not feel intimidated.