Interested in what are debt consolidation loans? Read this guide to avail your consolidation loan and manage your debts, saving money, towards a debt free life. Try our online credit counselling to manage your debts.
Like many Americans, you may have accumulated credit card debt balances in one or many credit cards. Credit card advances, though the most convenient, come with a very high rate of interest, and so you may find that you are repaying a substantial amount of your debt, in servicing only the interest part of your credit card loans. This gradually reduces your financial independence and leads you to a debt trap, where most of your income is spent in repayment or service of your debts. Your credit scores also nose dive with every passing day.
So how do you get out of your debts, how you manage your debt and how do you get freedom of debt relief? It is actually simpler than you thought. Just see if you can get a personal loan, large enough to cover all, or most of your credit card debts.
Credit card balances come with high rate of interest. Multiple credit card balances involve multiple credit card payments in different dates, involving financial inconvenience and management. They also spoil your peace of mind, give you stress, and dry up your finances, and a major part of your hard earned money goes in servicing these payments. A credit consolidation loan can put a stop to all these expensive payments, and help you pay back in much lower rate of interest, saving you major chunks of money every month. Also, you now have only one EMI or instalment to pay every month, so a single day. Managing your personal and home finance gets way simpler.
No more missed credit card payments, no more multiple loans and clean credit record. You can set right your financial health again, with some discipline.
Yes, since your personal loan is taken at a lower interest rate, the monthly outgo that you were making would come down, when compared to all credit card payments combined. It helps in better financial health and enables you to take control of your finances again, with your own debt management. What you save is what you earn.
This means, if you have taken pay day loans, or medical loans, they too come with very high rate of interest. You can pay those off as well, with your debt consolidation loan, and live a happier life, taking care to service the consolidation personal loan only.
Credit card loans do not come with end date, and you are always tempted to make a payment somewhere near the minimum amount payable, and hope for betterment next month, which does not really happen. Personal loans, on the other hand, come with a fixed tenure and fixed instalment amount. So you can freely plan on how to get rid of all debts, and live a debt free life, getting out of all your debts. After six months, generally speaking, personal loans do not carry any pre payment penalty, so in case of an increased income or win fall gain, you may choose to pay your personal loan in its entirety or in part, helping you further get out of your debts.
This primarily depend on your credit scores, but you can always negotiate for better rates. The rate offered should be substantially lower that your present credit card rates or pay day loan rates, for you to become financially comfortable over time. Opt for direct payments to credit card by the consolidation loan provider whenever possible, to help you maintain financial discipline. Please note that these loans have a wide band of 5% to 36% rate of interest, and a lot will depend on your negotiation and your banker, along with your credit scores.
You should be able to comfortably service the EMI amount of the personal loan that you are taking as a consolidation loan. Not servicing the EMI can land you into major problems. So make your calculations and be sure to arrive at an amount that you are comfortable with, this is important. The next part you should look into is the tenure of the loan. Longer tenure decreases the EMI amount, but you stay engaged for a longer period, and make higher outlay, in absolute dollar terms. Make a balance, for, this exercise is to free you of all your debts, with financial discipline, to reap the benefits later.
Upgrade, Marcus, SoFi, Happy Money, LightStream, Universal Credit, , Best Egg, Discover, FreedomPlus etc are some of the best known names for providing consolidation loans as personal loans. However, each of them offer different rates, and have their own disadvantages and advantages. We suggest you search for each of them, and get an offer from at least 5 of them, so that you get the best deal to consolidate your multiple debts elsewhere
Search for a Consolidated Loan Provider now, and get out of your debts. Apply for a fixed-rate, fixed tenure, no fee personal loan today: