Best Debt Consolidation Loans In California For Good & Bad Credit

Getting out of debt in California can feel out of reach for some. With a high cost of living, that seemingly continues to increase, the cycle of debt can continue. Getting out of debt starts with a commitment followed by a plan. Finding a solution that works for you is critical. For example, if you use a debt consolidation loan, you’ll want to ensure you can keep up with the payments. You’ll also want to work on budgeting to avoid taking on new debt alongside your debt consolidation loan. Paying careful attention to our finances and lifestyle can help us find ways to make our money work for us. Debt consolidation loans are commonly used in California, and with good reason, Debt consolidation loans can offer consumers the opportunity to combine debts into one fixed monthly payment with a potentially lower interest rate. While the immediate benefit might be the savings, or the convenience of making one fixed monthly payment, the benefits expand far beyond. 

Debt consolidation loans are designed to replace high interest loans or credit cards with one fixed loan with a lower interest rate. 

For example, let’s say you have 2 credit cards. Credit card A has a balance of $3,200 and credit card B has a balance of $2,100. You get approved for a $5,300 debt consolidation loan and the lender offers direct payment to creditors. The lender can pay the balance for credit card A and credit card B, transferring them to the new loan. Once credit card A and credit card B are paid in full and the accounts are closed, you will be left with one fixed monthly payment for a predetermined period. If you pay the monthly payment on-time over the course of the repayment period, you can pay the debt consolidation loan in full. See also: Credit Card Consolidation Loan

Debt consolidation can help make debt more manageable while helping consumers save money on interest. While the concept of it is rather straightforward, you’ll want to pay attention to the details. Ensuring the debt consolidation loan benefits you and saves you money is important to many. There may be transfer fees or other fees involved in the transaction that should be considered. 

Requirements can vary by lender, but similar to traditional loans,  requirements such as credit score, debt to income ratio, employment, and other factors can be examined. You may be requested to provide supporting documentation such as proof of identification or income, so you may want to be prepared with those. The lender may also request account information and balances for the accounts being consolidated into the new loan. Getting prequalified for a debt consolidation loan is one of the first steps in the process. Once you’ve chosen the best offer and know which lender you will work with, you can learn more about how debt consolidation loans work with the lender of choice. 

California can offer debt relief programs for individuals that qualify. Debt can become unmanageable, but rest assured help is available all you have to do is find it. 

Debt consolidation loans can be used for most kinds of unsecured debt. In the form of a personal loan, you may even be able to use excess money to cover other expenses such as medical bills or car repairs. 

Some debt consolidation loans are solely for consolidating debts. These loans usually come with direct payment to creditors, so the borrower does not ever physically receive the cash. Rather the lender pays off existing debts and rolls them into the new loan. 

Personal loans on the other hand are usually funded as a lump sum. Essentially you would take out a personal loan for a specified amount. When you receive the funds you can use them to pay off current account balances. If there are additional funds, you can spend them on other things. The funds from the personal loan would be repaid based on the agreement, which is usually a fixed monthly payment. Remember, though, the idea is to pay down debt and save money, so you may want to seriously consider borrowing more money than you actually need. The cycle of debt can become a dangerous one.