Consolidate Business Debt with a Loan
Most people avail financing to commence a business or expand their business. In this snare, they often suffer from multiple debts for which they have to pay high interest with little flexibility in the number of instalments. To get rid of multiple debt problems entailing high interest rates, individuals opt for business debt consolidation, where they take a much bigger loan to pay off all their other debts.
This consolidated debt is usually with a lower interest rate and facilitates them with the improved and feasible payback terms. It is considered to be much riskier than the other debts but people go for it because they want to get rid of multiple loans, so they could focus on just one loan and that too with a comparatively lower interest rate.
Unlike your other loans, which are often unsecured and thus people have to pay high interest on them, a loan to consolidate business debt is a secured one. A secure loan is a type of loan that is backed by collateral and thus results in a much lower interest rate. Most of the banks take homes or other properties as collateral but cars can also be used for such purposes.
One should have a pretty good idea of his/her total debts in order to have an estimate of the amount needed to consolidate his/her all other business loans.
Instructions
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1
You should add up all your loans including financings availed from banks or other lending institutions and all of your credit cards.
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2
Now is the time to calculate the interest you are paying on your each loan. Do not forget to note the interest rate of your credit card that will fall somewhere between 12 to 21 percent.
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3
Look out for all available options of lenders in order to compare their packages that would vary on the interest rate, payback period and the principal amount. Also note that your equity, income and credit history will play an important role in qualifying you for a particular amount of loan.
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4
Choose the best suitable lender from available options.
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5
After the lender has been finalised by you, provide all necessary documents to your lender and fill in the loan request form.
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6
You also need to provide copies of all loans and credit cards that are going to be paid off to your lender.
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7
After the loan process is complete, wait for the processing time, which is usually four weeks.
