When thinking of the term "low interest debt consolidation loan" it's almost an oxymoron. You need good credit to get low interest and most people who are in debt have fair or bad credit. This makes it extremely difficult to get a low interest loan. Of course just because something is difficult doesn't necessarily make it impossible. Let's explain.
In order for a lender to give you anything low interest you must prove two things. One, you have a decent credit score and two, you have money to pay upfront for what they are offering you. Generally, without these criteria there is a good chance that the interest on your loan will be high. Here are a few ways that you can remedy this problem.
#1. Get someone with a high credit score to co-sign the loan
Maybe you know a good friend of family member that can assist you by being a second person for your loan. This holds you and them accountable however, it gives the lender a little bit more trust with what they are giving you.
#2. Stash up at least 10% to 15% for an upfront payment
Do whatever you have to do necessary in order to make a cash down payment on the loan. You may have to cut back on luxuries for a little while. Hold a yard sale and get cash for your old items that you do not use any more. As a last resort, ask a close friend if you can borrow a little cash. The more money you have upfront the easier it is to receive the loan you want, especially when you have subpar credit.
#3. (Secret Tip) Get a gas card to build up your credit
The wonderful thing about gas cards is that almost anyone is approved for one and it is a great way to boost your credit score a little bit. The secret is to stash away any money you use for gas every week and use the gas card to fill up your car. At the end of the month pay the entire card off, and watch your credit score climb a few points. Rinse and repeat. You can at least get your credit score up 10 to 20 points in a 90 day window by working this trick. Of course the better your credit the better chance the lender will give you a fairly low rate.
Apply these simple tips toward getting a low interest debt consolidation loan. Although it is not a 100% guaranteed it will definitely give you a little bit of ground to stand on, even if your credit score isn't so hot.
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