Consolidation Loan

Believe or not, you can still get a consolidation loan, either a personal loan or a cash out refinance, if using the equity in your home. Despite all the news about all the foreclosures and properties being upside down on their property values, there are lending institutions that offer to lend money for a consolidation loan. There are still people that have equity in there homes. After all, owning a home is still the best asset and investment anyone can have.

What is a Consolidation Loan for?

What most people was a consolidation loan for is to combine all debt. Most commonly for consolidating credit card debt, home equity line or home equity loan, purchase an automobile or even to consolidate student loans. This allows you to have one monthly payment instead of numerous ones. It will alleviate the concern of perhaps being late on payments or missing payments which both could adversely effect your credit.

There are multiple lending institutions in which you can apply for a consolidation loan. Most common are banks, credit unions and direct mortgage lenders. Even your investment company that you have your retirement plan with as well as some real estate companies provide loans.

Where are the Best Consolidation Loans?

The best way to find a consolidation loan is to “shop around”. Compare what interest rates are, how much fees are, are points being charged, what is the term of the consolidated loan, is there a prepayment penalty? One other thing is be aware of, who service your loan, will it be sold? Most people don’t realize that the lender they start out with is not the lender that they will be making there monthly payments to.

Now that you have decided who and where has the best consolidated loan for you, here are some possible thing they may be required of you. First, they will run a credit report. Your credit score can effect the interest you qualify for. They will require your income, pay stubs, tax returns and bank statements. The lender will perform some type of appraisal, whether it is an actual appraiser going out to your home or automated value check. This will determine how much equity you have in your home.

What to do when your Loan is Approved

Now if you have survived all of the above and are approved, you will sign your loan documents and having them notarized. The deed is then recorded at the county recorders office and you are ready to start all over again.

There are many lending services out there. Always be aware of predatory lenders as well. If it sounds too good to be true it usually is. So do your homework and you can find a suitable consolidated loan the fits your needs.