How does a debt consolidation loan work?
Debt consolidation is just one way to reduce your debt and it can be a very effective way to manage the debt repayment process. To qualify for a debt consolidation loan, you need to have a steady, verifiable income that can support the monthly payment, and you can’t be in bankruptcy or foreclosure. Your interest rate and the loan amount will depend on your credit rating and your debt-to-income ratio. If you have a strong credit score, you will often qualify for a bigger loan, however, those with fair credit can often qualify for smaller loans with higher interest rates.