Consolidating fixed loans
Check for Prepayment Penalties Before signing on the dotted line to consolidate your debt you should look into a few more things.
Some lenders charge a prepayment penalty on their loan products.
Make sure to get a full and complete list of all fees before deciding on a loan.
Being able to compare the APR between your current loan products and the debt consolidation product that you’re considering will help you make a wise decision.
If Prime rises and you’re then paying more interest on the loan product you used to consolidate you could end up paying more interest and fees in the long run. APR Don’t be fooled by a simple interest rate that’s lower than your current interest rate, always ask for the APR.
It will not solve cash flow problems if your business is spending more than it makes in revenue.
Debt consolidation combines all of your debt into one loan. If you struggle remembering to make all your payments, now you only have one payment to worry about.
Instead of owing money to multiple lenders, you owe to just one company and only have one monthly payment. And you can set up auto-withdrawals from your checking account and forget about it.
If you’re talking to a lender about debt consolidation, ask them to provide you with the loan’s APR.
Often, once the origination fees, underwriting fees, and more are added into the cost of capital the loan consolidation may not save you as much money as you thought it would.