How do I compare debt consolidation loans?

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  • Price — comparative pricing factoring in interest and fees
  • Features — like the complexity of the application, the time involved before settlement, product management, customer service and loan closure
  • What is the interest rate and the comparison rate?
  • How do these rates compare to other loans?
  • What are the fees and charges? (e.g. upfront, ongoing, early exit)
  • What are the terms and conditions?
  • Do the loan term and loan amount fit your unique needs?
  • Can you definitely afford the repayments?
  • Are you comfortable with the lender? Have you checked its reputation and accreditation?
  • Are there flexible repayment options? Usually, you can choose between weekly, fortnightly or monthly repayments according to what suits your pay cycle. However, not all lenders offer this;  this may or may not matter to you
  • Compare a loan’s conditions and fees around making extra repayments and paying the loan off before the end of the term. This can be a great way to reduce the overall cost of your loan, but not if you’ll incur extra penalties
  • Can you use the funds for what you need the loan for? You can’t always use the borrowed money for whatever you like. Some lenders don’t allow you to take out a debt consolidation loan for business purposes. Most won’t allow you to pay debts overseas. Debt consolidation loans are usually extremely flexible, however, do make sure your plans match the lender's policies
  • What are the options for managing the loan over time? Check and compare how easy the loan will be to manage

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