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Although each lender will probably require different documentation depending on your credit history, the most commonly required pieces of information include a letter of employment, two months' worth of statements for each credit card or loan you wish to pay off, and letters from creditors or repayment agencies.If you have a good payment history with a bank, credit union or credit card company, asking that institution about a debt consolidation loan should be your first step.Favorable payoff terms include a lower interest rate, lower monthly payment or both.
However, there are specific instruments called debt consolidation loans, offered by creditors as part of a payment plan to borrowers who have difficulty in managing the number or size of their outstanding debts.
This works out to ,136.88 being paid in interest alone over time.
If the same individual were to consolidate those credit cards into a lower-interest loan at an 11% annual rate compounded monthly, he or she would need to pay 2.16 a month for 24 months to bring the balance to zero.
Creditors are willing to do this for several reasons, including that it maximizes the likelihood of collecting from a debtor.
These loans usually are offered by financial institutions, such as banks and credit unions, but there also are specialized debt-consolidation service companies.