What You Need to Know About Debt Consolidation Loans and How They Work

Debt consolidation loans have become increasingly popular as a strategy for individuals seeking to regain control over their financial situations. These loans allow borrowers to combine multiple debts into a single, manageable loan, typically with a lower interest rate. This article delves into the intricacies of debt consolidation loans, including their functionality, benefits, and essential considerations to help you make informed financial decisions.

What is a Debt Consolidation Loan?

In essence, a debt consolidation loan is a financial product designed to simplify your repayment process. By consolidating various debts—such as credit card balances, personal loans, or medical bills—into one loan, borrowers can streamline their monthly payments. This can lead to lower overall interest rates, which can save money in the long run.

How Do Debt Consolidation Loans Work?

The mechanics of debt consolidation loans are straightforward. Once approved, the loan amount is used to pay off existing debts, leaving the borrower with a single monthly payment. This not only simplifies financial management but also reduces the stress of juggling multiple due dates.

Types of Debt Consolidation Loans

• Secured Debt Consolidation Loans: These loans require collateral, such as a home or vehicle. While they often feature lower interest rates, they come with the risk of losing the asset if payments are missed.
• Unsecured Debt Consolidation Loans: These loans do not require collateral, making them less risky for borrowers. However, they typically carry higher interest rates and stricter credit requirements.

Benefits of Debt Consolidation Loans

Opting for a debt consolidation loan can offer several advantages:

• Lower Monthly Payments: Consolidation often results in reduced monthly payments, making it easier to manage finances.
• Improved Credit Scores: By paying off existing debts, borrowers may see an improvement in their credit scores over time.
• Reduced Stress: Managing a single payment can significantly decrease financial stress.

Who Should Consider Debt Consolidation?

Debt consolidation loans are particularly beneficial for individuals with multiple high-interest debts. If you’re struggling to keep track of various payments or are overwhelmed by high-interest rates, consolidation could simplify your financial situation.

Assessing Your Financial Situation

Before pursuing a debt consolidation loan, it’s crucial to evaluate your financial health. Consider your income, expenses, and total debt to determine if this option suits your needs.

Credit Score Considerations

Your credit score is a significant factor in qualifying for a debt consolidation loan. A better score can lead to more favorable loan terms, so understanding how your credit impacts your options is vital.

Potential Drawbacks of Debt Consolidation Loans

While there are many benefits, potential downsides exist:

• Fees and Costs: Be aware of origination fees or prepayment penalties that can increase the loan’s overall cost.
• Longer Repayment Terms: Extending repayment periods may lead to paying more interest over time.

How to Choose the Right Debt Consolidation Loan

When selecting a debt consolidation loan, compare interest rates, terms, and lenders. Thorough research can help you find the best fit for your financial needs.

Comparing Lenders and Offers

Shopping around is essential. Different lenders offer varying interest rates, repayment terms, and customer service. Taking the time to compare these factors can lead to significant savings.

Understanding Loan Terms and Conditions

Always review the terms and conditions carefully. Knowing the interest rate, repayment schedule, and any associated fees will help you avoid surprises later on.

What is a Debt Consolidation Loan?

Debt consolidation loans are increasingly popular financial solutions that enable individuals to merge multiple debts into one single loan. This process simplifies the repayment structure and often results in a lower overall interest rate, making it easier for borrowers to manage their financial obligations. By consolidating debts, individuals can focus on a single monthly payment instead of juggling multiple payments to various creditors.

Typically, these loans are used to pay off high-interest debts, such as credit card balances, medical bills, or personal loans. The primary goal is to reduce the financial burden by streamlining payments and potentially lowering interest costs. For many, this strategy can lead to improved cash flow, allowing for better budgeting and financial planning.

When considering a debt consolidation loan, it is essential to understand how these loans function. The process generally involves applying for a new loan that covers the total amount of existing debts. Once approved, the borrower uses the funds from the new loan to pay off the outstanding debts. This leaves the borrower with just one loan to repay, which can be a significant relief.

There are different types of debt consolidation loans, including:

• Secured loans: These require collateral, such as a home or vehicle, which can lead to lower interest rates but carries the risk of losing the asset if payments are not made.
• Unsecured loans: These do not require collateral, making them less risky for the borrower, but they often come with higher interest rates and stricter credit requirements.

Ultimately, debt consolidation loans can offer a pathway to financial stability for those struggling with multiple debts. However, it is crucial for borrowers to assess their financial situation and consider the potential risks and benefits before proceeding with this option.

How Do Debt Consolidation Loans Work?

Debt consolidation loans serve as a vital financial tool for individuals seeking to regain control over their financial situation. Understanding how these loans function is essential for anyone considering this option. Essentially, a debt consolidation loan allows borrowers to combine multiple debts into a single loan, which can streamline their repayment process.

When a borrower takes out a debt consolidation loan, the funds are typically used to pay off existing debts, such as credit card balances, personal loans, or medical bills. This process results in the borrower having one monthly payment to manage, rather than juggling multiple payments with varying due dates and interest rates. This simplification can significantly reduce the stress associated with debt management.

Moreover, many debt consolidation loans come with lower interest rates compared to the original debts, particularly if the borrower has improved their credit score since incurring those debts. This can lead to substantial savings over time, as less money is spent on interest payments.

However, it’s crucial to recognize that while debt consolidation can ease financial burdens, it does not eliminate the underlying debt. Borrowers must commit to disciplined financial habits to avoid accumulating new debt after consolidation. Effective budgeting and financial planning are key components to ensuring that the benefits of debt consolidation are fully realized.

Additionally, borrowers should be aware of the terms associated with debt consolidation loans. Factors such as fees, repayment terms, and potential penalties for missed payments can affect the overall cost and effectiveness of the loan. Therefore, it’s advisable to conduct thorough research and consult financial advisors to make informed decisions.

In summary, understanding the mechanics of debt consolidation loans is crucial for anyone looking to simplify their financial management and improve their overall debt situation.

Types of Debt Consolidation Loans

When considering debt consolidation, it’s essential to understand the various types of loans available. Debt consolidation loans can be broadly categorized into two main types: secured and unsecured loans. Each type comes with distinct characteristics, advantages, and potential risks that borrowers need to evaluate carefully.

Secured debt consolidation loans require the borrower to provide collateral, which could be a valuable asset like a home or vehicle. These loans typically offer lower interest rates compared to unsecured loans due to the reduced risk for lenders. However, the significant downside is the risk of losing the asset if the borrower fails to make timely payments. This type of loan can be beneficial for those with substantial equity in their property and a steady income, as it may provide a manageable way to consolidate debts.

In contrast, unsecured debt consolidation loans do not require any collateral, making them less risky for the borrower in terms of asset loss. However, they often come with higher interest rates and may have stricter credit requirements. Borrowers with good credit scores may find favorable terms, but those with lower scores might face challenges in securing these loans. Unsecured loans can be a viable option for individuals who prefer not to risk their assets but should be approached with caution due to the potential for higher long-term costs.

When deciding between secured and unsecured debt consolidation loans, borrowers should carefully assess their financial situation, including their credit score, income stability, and overall debt levels. It’s crucial to weigh the benefits of lower interest rates against the risks of asset loss. Additionally, understanding the total cost of the loan, including any fees, can help in making an informed decision. Ultimately, the right choice will depend on individual circumstances and financial goals.

Secured Debt Consolidation Loans

are a popular choice for individuals looking to streamline their financial obligations. These loans require the borrower to provide collateral, which can be in the form of assets such as a home, car, or other valuable property. This collateral serves as a guarantee for the lender, which typically results in more favorable loan terms.

One of the primary advantages of secured debt consolidation loans is the lower interest rates they usually offer compared to unsecured loans. This is because the lender has a reduced risk; if the borrower fails to make payments, the lender can seize the collateral to recover their losses. Therefore, borrowers often find these loans to be a cost-effective solution for managing high-interest debts.

However, it is crucial to understand the risks involved. If payments are missed, the borrower risks losing the asset used as collateral. This can be particularly concerning for individuals who may already be facing financial difficulties. Therefore, it is essential to assess your ability to make consistent payments before committing to a secured loan.

Additionally, secured loans often come with specific requirements and conditions. Lenders may evaluate the value of the collateral and the borrower’s credit score to determine eligibility. It is important for potential borrowers to shop around and compare offers from different lenders to ensure they are getting the best possible terms.

In summary, while secured debt consolidation loans can provide significant benefits, including lower interest rates and simplified payments, they also carry the risk of losing valuable assets. Therefore, careful consideration and planning are essential for anyone considering this option.

Unsecured Debt Consolidation Loans

are a popular choice for individuals looking to simplify their financial obligations without risking their assets. Unlike secured loans, which require collateral such as a home or car, unsecured loans are based solely on the borrower’s creditworthiness. This feature makes them appealing to many borrowers, as they do not face the risk of losing valuable property in case of default.

However, it is important to recognize that while unsecured loans eliminate the need for collateral, they often come with higher interest rates. This is because lenders perceive unsecured loans as more risky; without collateral, there is no guarantee that the loan will be repaid. As a result, borrowers may find themselves paying significantly more in interest over the life of the loan compared to secured options.

Additionally, obtaining an unsecured debt consolidation loan can be challenging for individuals with less-than-perfect credit. Many lenders impose stricter credit requirements, which can limit access for those who need it most. This means that borrowers may need to improve their credit scores or seek out specialized lenders who cater to those with lower credit ratings.

In summary, while offer a viable solution for managing multiple debts without the risk of losing collateral, borrowers must weigh the potential drawbacks, including higher interest rates and stringent credit requirements. It is crucial for individuals to assess their financial situation and explore all available options before committing to a loan.

Benefits of Debt Consolidation Loans

Debt consolidation loans are becoming increasingly popular among individuals seeking to manage their financial burdens effectively. One of the most significant benefits of these loans is the potential for lower monthly payments. By combining multiple high-interest debts into a single loan with a lower interest rate, borrowers can significantly reduce their monthly financial obligations. This can free up cash flow, allowing individuals to allocate funds towards savings or other essential expenses.

Another advantage is the potential for an improved credit score. When you consolidate your debts, you can pay off existing accounts, which may positively impact your credit utilization ratio. A lower ratio can lead to a better credit score over time, making it easier to secure favorable lending terms in the future. Furthermore, making consistent, on-time payments on your new consolidation loan can further enhance your credit profile.

Managing multiple debts can often lead to feelings of stress and overwhelm. Debt consolidation loans simplify this process by allowing borrowers to focus on a single payment each month rather than juggling several different due dates and amounts. This streamlined approach not only reduces the mental burden associated with debt management but also helps individuals develop a clearer repayment strategy.

Additionally, debt consolidation can open doors to financial education and better budgeting practices. Many lenders offer resources and support to help borrowers understand their financial health and make informed decisions moving forward. This guidance can empower individuals to avoid falling back into debt and to create a sustainable financial plan.

In summary, the benefits of debt consolidation loans extend beyond immediate financial relief. They can lead to lower payments, an enhanced credit score, reduced stress, and opportunities for improved financial literacy. By understanding these advantages, individuals can make informed choices about their financial futures.

Who Should Consider Debt Consolidation?

Debt consolidation loans can be a viable solution for many individuals grappling with the burden of multiple debts. These loans are particularly beneficial for those who find themselves overwhelmed by high-interest debts, such as credit card balances, personal loans, or medical bills. By consolidating these debts into a single loan, borrowers can simplify their financial situation and potentially save on interest payments.

Individuals who should consider debt consolidation typically have several high-interest debts that are challenging to manage. For example, if you are juggling multiple credit card payments each month, a debt consolidation loan can help you combine these into one manageable monthly payment. This not only makes budgeting easier but can also lead to significant savings on interest over time.

Moreover, those who experience difficulty keeping track of various due dates and payment amounts may find debt consolidation particularly appealing. By consolidating debts, you can streamline your payments, reducing the risk of missed payments and late fees.

However, it’s essential to assess your financial situation thoroughly before pursuing a debt consolidation loan. Consider your total debt, income, and expenses to determine if this option aligns with your financial goals. If your spending habits do not change after consolidation, there is a risk of accumulating more debt, which could exacerbate your financial situation.

Additionally, individuals with a stable income and a reasonably good credit score are often better positioned to qualify for favorable terms on debt consolidation loans. Understanding your credit score and how it affects your loan options is crucial. If your credit score is low, you may face higher interest rates or may not qualify for a loan at all.

In summary, debt consolidation loans are suitable for those with multiple high-interest debts looking to simplify their financial situation. However, careful consideration of your financial state and spending habits is essential to ensure that this strategy leads to long-term financial health.

Assessing Your Financial Situation

When considering a debt consolidation loan, it is crucial to conduct a thorough assessment of your financial situation. This evaluation serves as a foundation for determining whether consolidation is a suitable choice for you. Here are the key aspects to consider:

• Income: Begin by analyzing your monthly income. This includes your salary, bonuses, and any additional sources of income such as freelance work or rental income. Understanding your total income will help you gauge how much you can allocate toward debt repayment.
• Expenses: Next, take a close look at your monthly expenses. Categorize them into fixed expenses (like rent or mortgage) and variable expenses (like groceries and entertainment). This will provide insight into your spending habits and identify areas where you can cut back to free up funds for debt repayment.
• Total Debt: Compile a comprehensive list of all your debts, including credit cards, personal loans, and any other obligations. Note the outstanding balances, interest rates, and minimum monthly payments. This will give you a clear picture of your overall debt load.
• Debt-to-Income Ratio: Calculate your debt-to-income (DTI) ratio by dividing your total monthly debt payments by your gross monthly income. A lower DTI ratio is generally favorable and indicates that you are in a better position to manage additional debt.
• Credit Score: Your credit score plays a significant role in determining your eligibility for a debt consolidation loan. Obtain a copy of your credit report and check your score. Understanding your credit standing can help you identify potential loan terms and interest rates.

By carefully evaluating these factors, you can make an informed decision about whether a debt consolidation loan is the right step for you. This preparation not only helps in securing better loan terms but also sets a solid groundwork for achieving long-term financial stability.

Credit Score Considerations

Your credit score is not just a number; it is a crucial factor that can significantly influence your ability to qualify for a debt consolidation loan. Understanding the intricate relationship between your credit score and loan terms is essential for making informed financial decisions.

A credit score typically ranges from 300 to 850, with higher scores indicating better creditworthiness. Lenders use this score to assess the risk of lending you money. Generally, a score above 700 is considered good, while scores below that may lead to higher interest rates or even denial of loan applications.

When applying for a debt consolidation loan, lenders often evaluate your credit score to determine the interest rate and terms of the loan. A higher credit score can lead to more favorable terms, such as:

• Lower Interest Rates: Borrowers with good credit scores often qualify for lower interest rates, which can save them significant amounts over the life of the loan.
• Higher Loan Amounts: Individuals with strong credit histories may be eligible for larger loan amounts, allowing them to consolidate more debt.
• Flexible Repayment Terms: A good credit score can also provide access to more flexible repayment options, making it easier to manage monthly payments.

On the other hand, if your credit score is on the lower end, you may face challenges:

• Higher Interest Rates: Lenders may charge higher rates to offset the risk associated with lending to someone with a lower credit score.
• Limited Loan Options: You might have fewer choices when it comes to lenders willing to work with you.
• Potential Denial: In some cases, your credit score may disqualify you from obtaining a loan altogether.

It’s important to regularly check your credit report for errors and work on improving your score before applying for a debt consolidation loan. Simple actions like paying bills on time, reducing credit card balances, and avoiding new debt can help enhance your credit profile.

By understanding how your credit score affects your loan terms, you can make better financial choices and increase your chances of securing a debt consolidation loan that meets your needs.

Potential Drawbacks of Debt Consolidation Loans

Debt consolidation loans can be appealing for those seeking financial relief, but it is essential to be aware of the potential drawbacks associated with them. Understanding these downsides can help borrowers make more informed decisions regarding their financial futures.

One of the primary concerns is the fees and costs that may accompany debt consolidation loans. Many lenders charge origination fees, which can add up and diminish the savings achieved through lower interest rates. Additionally, some loans may come with prepayment penalties, which can further increase the overall cost if borrowers decide to pay off their loan early. It is crucial for individuals to read the fine print and understand all associated fees before committing to a loan.

• Origination Fees: These are upfront costs that can range from 1% to 5% of the loan amount.
• Prepayment Penalties: Fees charged for paying off the loan ahead of schedule, which can negate potential savings.

Another significant drawback is the possibility of longer repayment terms. While consolidating debt can lower monthly payments, it may also extend the repayment period. This means borrowers could end up paying more in interest over the life of the loan. For instance, what might have been a three-year repayment plan could stretch to five or even seven years, increasing the total cost significantly.

Moreover, there’s a risk of accumulating more debt if spending habits do not change. Debt consolidation can sometimes provide a false sense of security, leading individuals to take on new debt while still managing their existing obligations. Without a solid plan to address spending behaviors, borrowers may find themselves in a worse financial situation than before.

In summary, while debt consolidation loans can offer relief, it is vital to consider the potential drawbacks. By being aware of fees, longer repayment terms, and the risk of incurring additional debt, borrowers can make informed choices that align with their financial goals.

Fees and Costs Associated with Debt Consolidation

When considering debt consolidation loans, it is crucial for borrowers to understand the various fees and costs that may be associated with these financial products. Being informed about these potential expenses can significantly impact the overall cost of the loan and, ultimately, your financial health.

One common fee that borrowers encounter is the origination fee. This fee is typically charged by lenders for processing a new loan application and can vary widely depending on the lender and the loan amount. It is essential to factor this fee into your overall loan cost, as it can range from 1% to 5% of the loan amount. For example, if you are consolidating $10,000 in debt and face a 3% origination fee, you would need to pay an additional $300 upfront.

Another important consideration is the prepayment penalty. Some lenders impose this fee if you pay off your loan early, which can negate the benefits of consolidating debt in the first place. This penalty is designed to compensate lenders for lost interest revenue. Before committing to a loan, it is advisable to inquire about any prepayment penalties and evaluate how they might affect your ability to pay off the loan sooner.

Additionally, borrowers should be aware of other potential costs, such as late payment fees and annual fees. Late payment fees can add up quickly if you miss a payment, and annual fees may be charged by some lenders for maintaining your account. Understanding these fees in advance can help you avoid unexpected costs that could derail your repayment plan.

In summary, when exploring debt consolidation loans, it is vital to conduct thorough research and ask lenders about all associated fees. A clear understanding of these costs will empower you to make informed decisions and select the most suitable loan for your financial situation.

Longer Repayment Terms

When considering debt consolidation loans, one of the significant factors to keep in mind is the possibility of . While these loans can simplify your financial situation by merging multiple debts into a single monthly payment, they may also extend the duration of your repayment period. This extension can have profound implications on the overall cost of the loan.

The primary advantage of a longer repayment term is the potential for lower monthly payments. By spreading out the repayment over a more extended period, borrowers can find relief from immediate financial pressure. However, this relief often comes at a cost. Over time, the total interest paid can increase significantly, leading to a situation where you end up paying more than you initially owed.

For instance, consider a scenario where you consolidate several high-interest credit card debts into a single loan with a longer repayment term. While your monthly payments might decrease, the overall interest accrued during the life of the loan may surpass the original amounts owed. This situation necessitates a careful evaluation of the loan’s total cost before proceeding.

Moreover, extending the repayment period can also impact your financial habits. Borrowers might feel less urgency to manage their spending, potentially leading to the accumulation of new debts. This cycle can create a precarious financial situation, where the initial goal of consolidation to simplify debt management may backfire.

To navigate these complexities, it is crucial to assess your financial situation thoroughly. Consider factors such as your current income, expenses, and long-term financial goals. Engaging with a financial advisor can also provide valuable insights tailored to your specific circumstances.

In summary, while longer repayment terms associated with debt consolidation loans can offer immediate relief, they also carry the risk of increased overall costs and the potential for ongoing financial challenges. Being informed and cautious is essential when considering this option.

How to Choose the Right Debt Consolidation Loan

Choosing the right debt consolidation loan is a critical step in managing your financial health. With numerous options available, it’s essential to approach the selection process with a clear strategy. Here are key factors to consider when making your decision.

• Compare Interest Rates: Start by examining the interest rates offered by various lenders. A lower interest rate can significantly reduce your monthly payments and the total amount paid over the loan’s lifetime.
• Evaluate Loan Terms: Look closely at the terms of each loan, including the repayment period and any flexibility in payment schedules. Longer terms may lower monthly payments but can increase the overall interest paid.
• Assess Lender Reputation: Research potential lenders by reading customer reviews and checking their ratings with organizations like the Better Business Bureau. A reputable lender should have a history of transparent practices and excellent customer service.
• Understand Fees: Be aware of any associated fees, such as origination fees, application fees, or prepayment penalties. These costs can affect the overall affordability of the loan.

Additionally, consider your credit score when selecting a loan. A higher credit score can provide access to better interest rates and terms. If your credit score is less than ideal, you may want to explore options for improving it before applying for a loan.

Another important aspect is the type of loan you choose. Secured loans may offer lower rates but come with the risk of losing collateral. Unsecured loans, while generally more accessible, may have higher rates and stricter eligibility criteria.

Lastly, take the time to read the fine print of any loan agreement. Understanding all terms and conditions is crucial to avoid unpleasant surprises in the future. By conducting thorough research and comparing your options, you can find the debt consolidation loan that best fits your financial needs and goals.

Comparing Lenders and Offers

When considering a debt consolidation loan, comparing lenders and their offerings is crucial to making an informed decision. With a variety of options available, taking the time to evaluate different lenders can significantly impact your financial future.

First and foremost, interest rates are a key factor to assess. Lenders may offer varying rates based on factors such as your credit score, income, and the type of loan you choose. A lower interest rate can lead to substantial savings over time, so it’s essential to shop around and gather quotes from multiple lenders.

Next, consider the repayment terms. Different lenders may provide various repayment options, including the length of the loan and the flexibility of payment schedules. Some may offer longer repayment periods, which can lower your monthly payment but might result in paying more interest in the long run. Conversely, shorter terms may lead to higher monthly payments but can save you money on interest.

Another important aspect to analyze is the customer service provided by each lender. A lender with a strong reputation for excellent customer support can make the loan process smoother and help you navigate any issues that may arise during repayment. Reading reviews and seeking recommendations can provide valuable insights into a lender’s service quality.

Additionally, be aware of any hidden fees associated with the loan. Some lenders may charge origination fees, late payment penalties, or prepayment penalties that can affect the overall cost of the loan. Ensure you fully understand all potential costs before making a commitment.

In summary, taking the time to compare lenders thoroughly can lead to better loan terms, lower interest rates, and a more manageable repayment plan. By evaluating interest rates, repayment terms, customer service, and associated fees, you can secure a debt consolidation loan that aligns with your financial goals.

Understanding Loan Terms and Conditions

When considering a debt consolidation loan, it is crucial to understand the terms and conditions associated with it. This understanding can significantly impact your financial health and help you avoid unforeseen complications down the line.

One of the first aspects to examine is the interest rate. Interest rates can vary widely based on the lender, your credit score, and the type of loan you choose. A lower interest rate can mean substantial savings over time, so it is essential to compare rates from multiple lenders before making a decision.

Next, pay close attention to the repayment schedule. This includes the duration of the loan and the amount of each monthly payment. A longer repayment term may result in lower monthly payments, but it can also lead to paying more interest overall. Conversely, a shorter term may require higher monthly payments but can save you money in the long run.

Additionally, be aware of any associated fees that may come with the loan. Common fees include origination fees, late payment fees, and prepayment penalties. These costs can add up quickly and impact the overall affordability of the loan. Always read the fine print and ask the lender about any fees that may not be immediately obvious.

Finally, it is wise to consider the overall loan structure. This includes understanding whether the loan is secured or unsecured, as this can affect your risk level. Secured loans typically require collateral, while unsecured loans do not, but they may come with higher interest rates.

In summary, thoroughly reviewing the terms and conditions of a debt consolidation loan is paramount. By understanding the interest rates, repayment schedules, and associated fees, you can make an informed decision that aligns with your financial goals.

Frequently Asked Questions

• What is a debt consolidation loan?

  A debt consolidation loan is a financial tool that allows you to combine multiple debts into a single loan, often with a lower interest rate. This makes repayment simpler and more manageable.

• How does a debt consolidation loan work?

  These loans pay off your existing debts, leaving you with just one monthly payment to manage. This can help streamline your finances and reduce the stress of juggling multiple bills.

• Who should consider a debt consolidation loan?

  Debt consolidation loans are ideal for individuals with multiple high-interest debts, such as credit cards, who are looking to simplify their financial situation and save on interest payments.

• What are the potential drawbacks of debt consolidation loans?

  While they can be beneficial, there are drawbacks to consider, such as fees, longer repayment terms, and the risk of accumulating more debt if spending habits do not change.

• How can I choose the right debt consolidation loan?

  To find the best debt consolidation loan, compare interest rates, terms, and different lenders. It’s crucial to thoroughly research your options to ensure you make an informed decision.