How to Consoladate Debt Without a Lawyer
- 1). List outstanding debt. The first thing you must do is find out how much debt there is to consolidate. Get a pen and pad or use a software program to list all of your outstanding debt. Make sure to include the payee name, address, account number and total outstanding balance. Once you made the list, total all of the outstanding debt to determine how much you need to borrow.
- 2). Review your credit score. Since you're about to shop around for a debt consolidation loan, it's best for you to know your credit score. Request a free credit report before you start shopping. This way if there is something on your credit that might prevent you from getting a loan, you are prepared with a letter of explanation.
- 3). Shop around for a debt consolidation loan. Start with your own bank to see if you qualify for a debt consolidation loan. Be sure to understand the loan interest rate and repayment terms. Additionally, find out if the bank requires you to close out any of the outstanding debts. If your credit is over extended, many banks require the applicant to close out outstanding credit card accounts.
- 4). Go to more than one bank. Before you take the first debt consolidation loan that approves you, shop around to ensure your loan has competitive terms and rates.
- 5). Compile the latest debt statements. The time between listing your outstanding debt and securing the loan may take a few weeks. In that time you most probably have made payments, which serve to reduce your outstanding debt. Bring a list of the latest statements with you to the bank when you sign for the loan. Many times the bank will issue the checks directly to the financial institution holding the debt. You want to make sure it issues the checks in the correct amount.
