Consolidation Loan - Fresh Help in Repaying Old Loans

2007-03-08 10:33:40

( Financial )



Your credit history began when you took your very first student loan. If you are now pursuing your education using that very first loan, you hold a great opportunity in your hands. You stand a good chance with the all-important matter of keeping a good credit rating with the influential credit-record-keeping companies. It’s imperative that you meet all your student loan obligations at all times.

In later years, possibly long after you outgrow the need for school loans, you’ll learn that a good credit rating greatly affects your chances of obtaining loans from the very influential credit companies who keep and share records of loan-takers.

Reorganize numerous loans

In a perfect world, you need only apply once for a school or business loan. However, many people who already have loans often find that they are still short on funds to complete their pursuit of important opportunities. Assuming your income can well afford it, taking additional loans is both prudent and necessary. The difficulty that confronts you in this case is in keeping records of all your payments and reconciling all financial transactions.

If such is your situation, you will find that along with a host of important considerations, your credit history may be protected or aided by financial instruments designed to consolidate student loans or to consolidate school loans in general.

Time is of the essence to gain advantages

When applying for a consolidation loan, remember that time is of the essence in gaining all the advantages built into such a loan. You must work to get the process moving expeditiously to reap the rewards of locking in your interest rates, in some cases reducing your monthly payments by up to 40%. In the interest of saving money now when it is most needed, some people opt for flexible repayment terms. Whatever your decision, the consolidation loan has the effect of making it appear, at least on paper, that all your numerous loans have been repaid, thus improving your credit rating.

Assuming that you have already performed a due diligence on a debt consolidation company of your choice, the process of applying starts by filling the application form of your chosen company, discussing your eligibility for lower payments, what discounts are applicable, and how the rates are computed. You then wait about 60 days while your chosen company checks on the completeness of the information in your application form as well as the attached documents. They will ensure compliance with all laws regulating these financial practices and will determine exactly how much you owe based on loan verification certificates from your existing loans companies.

Tip: continue payments while you wait

While waiting, it is imperative that you continue to pay all your existing obligations to your original loans company. Failing payments at this time could jeopardize your chances of a fresh, convenient and financially-life-saving consolidation loan.


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