How to Get a Low Interest Rate Debt Consolidation Loan

Many people are interested in debt consolidation when they find themselves in debt that they can't seem to get paid off. Paying off all of your outstanding debts and only making one payment per month is very appealing for many reasons, such as ease of managing your bills and stopping creditors from harassing you. While these reasons are appealing, you need to get a low-interest debt consolidation loan to improve your financial situation as soon as possible. In this article, we will cover four of the best ways of achieving this.

Step 1

Home equity loans offer low-interest rates because they are secured with your property and reduces the chances of you defaulting. You can also choose to cash out your equity by refinancing or applying for a second mortgage or line of credit. Refinancing your home can cost thousands in upfront fees, but they can offer you overall lower payments. Many people choose second mortgages or new lines of credit because they usually cost zero to a couple hundred dollars to open. The down side is that their rates are higher than a traditional mortgage, causing most people to go with a home equity loan.

Step 2

The second method for getting low interest is by opening a new credit card account. If you shop around, you can easily find a credit card company that has a zero percent rate of interest on the transfer of balances. Of course, these types of offers are introductory, so you can expect the rates to jump in six to 12 months. The increase of interest rates isn't good, but you can start paying down debt you owe while the rates are still low. At the end of the introductory period, you can open another account or look for a long-term loan with low rates. There are risks with transferring your balances. Make sure you read the credit card companies terms so that you are aware of any fees that are charged for transfers.

Step 3

Personal loans are a good third option for reducing your personal debt. These loans are offered through banks and other financial lenders and can help you with debt consolidation. Your ability to get one of these loans will be based on your credit score and cash assets. You also have to take into consideration that since these are unsecured, the rates will be higher. However, when compared to credit card rates, they are still significantly lower.

Step 4

The fourth method of acquiring low-interest debt consolidation loans is by shopping loan rates. You should always be sure to research the rates regardless of what type of loan you choose. You can save thousands in interest rate charges by comparing the many different lenders and the different types of loans they offer. Shopping for the best loan rates doesn't have to be painful either. Most lenders post their rates online for easy access, but just as with the credit card transfer, be sure to read their terms to make sure you don't get caught paying a lot of fees.


With these four methods, you shouldn't have any problems finding a low-interest debt consolidation loan. By doing your homework, you can end up saving yourself thousands of dollars that can go toward paying off your personal debts.