Debt consolidation is the core of our products. Whether you are suffering from credit card debt, unsecured debt from the likes of payday loans and such, we can help you consolidate these and begin your journey to debt freedom.
So What Is Debt Consolidation?
Debt consolidation is basically when we take all of your debts into one lump sum. This sum is then loaned to you at a set interest rate and all of your current debts are paid off, leaving just one payment.
This loan is normally cheaper, or has a lower APR, than your current loans. You can also extend the period that you repay the debt, making the repayments more affordable. However, when you do extend the period of your loan this means that you are paying interest on your loans for longer and as such you have to be careful that you are not paying more interest than before.
Sometimes though, this is unavoidable. If you don’t repay the debts that you owe their is a high risk of default and bankruptcy. This is not a pleasant experience for anyone.
Pros of Debt Consolidation
These are some of the benefits of using debt consolidation -
- Repayments are smaller
- Avoid bankruptcy
- No more irritating debt collection calls
- One manageable repayment, set at your comfortable level
3 Things You Should Know About Debt Consolidation
People end up in debt for many reasons, whether it’s credit card debt due to emergencies or lack of money management skills, student loans for college, unemployment, etc. If you have incurred debt, you should remember that there are many people in a similar situation, and that there is help available. Getting a debt consolidation quote can help you to get control of you financial situation and start getting out of debt.
Credit card debt can be extremely difficult to get out of because most credit card companies offer low interest rates for the first six months or so. However, after this initial period, the interest rates tend to skyrocket, and any debt that has been incurred starts increasing dramatically. Someone once said the definition of insanity is doing the same thing over and over again and expecting different results. If you pay the minimum on your credit card bill each month, you will never get out of debt. You need to do something different, and that might mean taking out a debt consolidation loan.
Even if your debt is confined to student loans, these can add up to astronomical figures by the time you’re done with school. As well, the job market isn’t as good as we’d like it to be, and your paycheck may not be as big as you hoped. Most people end up with multiple student loans over the years, and sometimes these have different interest rates.
Quite often people have debt in more than area and end up with multiple loans, multiple different payments, and multiple different interest rates which may or may not change as time goes by. Dealing with all of these different loans and debts can be difficult to manage.
However, there is a way to help you take care of your financial obligations in an easier manner. With debt consolidation, you can exchange your multiple loans for just one, making your debt management easier to keep track of. This is a great opportunity and one that is available even if you have bad credit.
Debt Consolidation is Not a Scam
Debt consolidation works on the principle of taking out a new loan to pay off an existing loan. While this might seem like it wouldn’t be much help, if done properly, taking out a debt consolidation loan can help you to reduce and manage your debt.
Debt consolidation works best when you can go through a bank or other financial business. These types of financial institutions can get you better deals and lower interest rates on similar debt consolidation loans.
While debt consolidation is not a quick fix to your debt problem, it can be helpful in managing your debt. The main problem that people run into with debt consolidation is that they think their problem is fixed, and then promptly incur more debt. Or people don’t bother to search debt consolidation reviews for a company and end up paying higher interest rather than gaining debt relief.
There are limits to what debt consolidation options can do for you. If you aren’t ready and willing to commit to a budget, you should consider talking to a debt counselor and getting debt advice before you get a debt consolidation option quote.
Loan Calculators are Amazing
Loan calculators are a tool that allows you to manage your monthly loan payments. This is a financial tool that you can find online, and most of them are free, which is amazing.
There are different loan calculators out there, and you can find one that fits your needs best. Loan calculators ask you to put in amounts for different things, such as the balance of your loan, the percentage that you put down, how long the term of your loan is (ie: 5 years, 15, etc.), the annual interest rate of your loan, any applicable loan fees, and the minimum amount that you have to pay each month (if applicable).
Once you enter in this information, the loan calculator then tells you how much you need to pay each month to eliminate your debt. Loan calculators usually assume that your monthly interest rate will stay the same and that you will be paying the same amount each month.
Many loan calculators also provide a spot for you to include your salary, so that they can work within your budget. The first step to reducing and eventually eliminating debt is working out a budget that you can work with and sticking to it.
You Can Get a Debt Consolidation Loan Even if You Don’t Own a Home
While it is true that if you are a homeowner, you can usually get a lower interest rate on a debt consolidation loan, that is not the only option available. Homeowners can get lower interest rates because they can use their home as collateral in a mortgage, a second mortgage, or a home equity loan. However, this can also be a very risky thing to do if the mortgage is too high or you don’t plan properly.
If you don’t own your home or you have bad credit, you have the option of taking out a personal loan. Personal loans tend to have higher interest rates than mortgages, but lower interest rates than credit cards. If your debt is mostly credit card debt, and especially if you have debt on multiple credit cards, a debt consolidation loan might be able to help you to greatly reduce the interest that you’re paying each month.
The best thing to do is sit down with a financial management counselor or enroll in a credit relief program. They can help you look at your finances and your options to see what would work best for your personal situation.
Debt consolidation loans aren’t for everyone, but they could be the answer to your financial problems. To find out if debt consolidation loans can help you, get a quote today. Getting debt relief starts by getting debt advice.