How to Borrow Money to Pay Debt

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If you have high levels of credit card debt, a debt consolidation loan can help you dig out from under that mountain of debt and get a fresh start. Paying off an 18% credit card bill is like making an 18% return on your money--certainly an important consideration. Shopping around for the best deal on the loan you need can save you even more.

Things You'll Need

  • Credit card bills
  • Credit report
  • Loan application
  • Gather all of your credit card bills and add up how much you owe. Create a spreadsheet or a chart showing the amount owed on each card, as well as the interest rate on each card.

  • Request a copy of your credit report from all three credit reporting agencies, using a website that provides that information. Review those reports carefully and notify the agencies of any errors you find. An inaccurate entry in your credit report could cause you to be turned down for a loan, or at least be forced to pay a higher interest rate.

  • Approach the loan officer at your bank and ask for a loan to cover the amount of your high interest credit card debt. Complete the loan application and wait for a loan decision.

  • Complete other loan applications at other financial institutions while you are waiting for a decision. This will help you get the best interest rate on the loan you need.

  • Call the issuer of each credit card to cancel your account. Consider keeping a single credit card for emergency purposes, and do not charge anything to that card that is not a true emergency expense.

References

  • Photo Credit money, money, money image by easaab from Fotolia.com
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