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Find the Best Personal Loan for Debt Consolidation in 5 Easy Steps

Feb 13, 2023
woman paying her bills

If you find yourself in a financial situation where you have a lot of debt from credit cards and loans with a less than stellar interest rate, it may be difficult to keep up with the monthly payments and feel like you are wasting your hard-earned money.

Debt consolidation can help you get back on track! Reduce high-interest rates, lower your monthly payments, or shorten the length of time you are in debt with a personal loan from your trusted local lender. There are several types of debt consolidation loans available for consumers, with one of the most popular being a personal loan for debt consolidation.


A Personal Loan Is A Great Option for Debt Consolidation


It’s no wonder that a personal loan for debt consolidation is a popular choice among consumers. Personal loans offer repayment schedules that are flexible and fixed offering you a chance to customize your repayment options. A personal loan for debt consolidation is typically an unsecured loan that is low-risk for consumers and has more advantages than higher-rate credit cards. Choose a personal loan from a trusted lender that offers competitive rates and low fees to make the most out of your debt consolidation options.


5 Essential Steps to Find the Best Personal Loan for Debt Consolidation


1. Calculate Your Total Debt

The first step to finding the best personal loan for debt consolidation is to calculate the amount of money you owe to creditors. Use a debt consolidation calculator to find your total debt to begin the search for the best debt consolidation option for your situation. 


man calculating his debt


2. Research Lender Options

Once you decide a personal debt consolidation loan is right for you, it’s time to do your research to find the best lender options. Having a trusted lender you know you can count on is key to finding the best personal loan for your debt consolidation needs. Since many lenders offer personal loans, it is important to do your research and explore your options with local and online financial institutions for a reputable lender to work with.


3. Get Prequalified for More Than One Personal Loan

It’s always a good idea to have a backup plan, so savvy consumers should get prequalified with multiple lenders for their debt consolidation loan needs. Remember that being prequalified does not mean that you will definitely get approved, but it will assist you in determining which loan options you have, and which will work best for your unique situation. 


4. Decide on the Best Personal Loan Option

Researching personal loans and their average rates and fees will allow you to compare the available loan options to see which is the best fit for your situation. The best loans will save you money on your current debt by lowering your monthly payment, saving money by reducing the total interest you would pay over the life of the loan, or saving you additional monthly payments by shortening the length of the loan. Be sure to also compare other fees that may come along with personal loan applications to help you find the best loan available.


5. Apply for Your Personal Loan

Once you have determined that you have found the best personal loan for debt consolidation, once you have applied, and been approved, don't stop here! Continue your journey to becoming debt free with these final three steps. 


man applying for a loan to consolidate his debt


Bonus Steps to Help You Become (and Stay) Debt Free


6. Receive Your Loan Funds 

When you secure loan funding, the lender will send the money directly to you so that you can pay off your debt. Often the money is deposited directly into your bank account.


7. Pay Off Your Debts with Your Personal Loan Money 

Be sure to spend this money for the exact purpose of the loan: debt consolidation. While it may be tempting, do not spend the money from your personal loan funds to make new purchases. In fact, it is a good idea to pay off the debt as soon as possible after getting the consolidation loan to avoid additional interest on the debt.


8. Maintain Good Spending Habits 

Now that you are on the road to financial freedom, it is imperative that you make smart choices when it comes to spending and debt. Good habits that include a commitment to a budget and payment plan will provide a bright financial future.


CCCU Can Help With Your Debt Consolidation Goals


If you are planning to consolidate your debt to save money, reduce the length of your loan repayments, or simplify your monthly bills, CCCU is here to help.

If you are ready to consolidate your debt, visit any of our branch locations or apply online for Home Equity Loans, Personal Loans, or Low Rate Credit Cards.