WHAT'S NEW

BENEFITS

  • Combine your credit cards into one payment
  • One low program payment
  • Get out of debt quickly
  • Submit form for a free consultation

Debt consolidation loans

So you’ve been setting aside money to pay off multiple debts for some time but it seems like it’s not making any difference on your debt balance. Your creditor has been harassing you though phone calls and letters about your debt balance and to pay on time. You’re neck-deep in debts with a financial record gone off track and you want nothing more than to put things in order again. If you’re currently going through all that, a debt consolidation loan may just be the solution for you. But before you dive headfirst into the unknown, here are some things that you need to know:

What is a debt consolidation loan?

Wouldn’t you love to pay off all or most of your unsecured bills (credit cards, payday loans, medical bills etc) at once? This is exactly what a debt consolidation plan can do for you. Instead of paying multiple creditors, you only have to deal with a single loan which you’ll repay through an affordable payment plan. But compared with the interest rate on your credit cards, it offers a lower interest rate which can make your monthly payments lower than most of your current bills. A debt consolidation loan is also usually available for a longer term compared with regular loans. And with low rates and a longer payback term, your monthly payments are comparatively lower. A consolidation loan can also make budgeting easier for you. Instead of replacing several bills, all it takes is one easy manageable payment. And as you’re paying off your debt, your credit score actually shines, creating a positive impact on your credit.

How do you qualify for the loan?

In order to qualify for unsecured debt consolidation loans, a good credit score and appreciable income is needed. The purpose is to make sure that you can make payments on the consolidation loan in addition to repaying your monthly bills and expenses. Moreover, you can’t get such a loan if the total amount you owe is too low.

How much does it cost to take out the loan?

Depending on the financial institution that offers the loan, you need to pay certain fees. Normally, the interest rates on the consolidation loans are lower than that of the credit cards. However, be aware that some financial companies charge extremely high rates on the loans. It is always better to take out a loan from a financial institution that charges low interest rates.

What should you check before you apply for the loan?

First, check your credit report. It will help you identify financial/credit problems that can be eliminated using low debt consolidation loans.

Second, calculate the total amount you owe. This is essential as it will help you decide how much of a consolidation loan you’ll need in order to pay off your dues.

Third, decide on what type of bills (credit cards, payday loans, etc.) you’ll pay off with the low debt consolidation loan. This is because your total dues can be much higher compared with the consolidation amount available. However, a low interest account will not be accepted as it is easily manageable.

And fourth, plan a budget. You need to work out a monthly budget and find out what amount you can pay towards the consolidation loan on a monthly basis.

Does the consolidation loan have disadvantages?

Usually, an unsecured debt consolidation loan involves a longer repayment term. Meaning, even if your monthly payment is low, you actually end up paying much more in total interest throughout the term of the loan. Furthermore, unsecured debt consolidation loan doesn’t provide you with any tax benefit. This is because the interest on a personal loan is not tax deductible like the interest on a mortgage loan.

Low debt loans can help you to consolidate all your debts into a single manageable payment. Not only does it help you get out the debt pit but it also helps bring your finances back on track and create a positive impact on your credit.

LATEST ARTICLE

Credit card Holders protection laws

Getting your own credit card certainly has its perks but before you fill up that application form and do get one, be aware of the existing credit card laws and also be assured that the law is going to protect you. Read on and always be legally ready: Read More »

Medical Debt - Medical Bill Options

Nurturing a good credit score is important as this is where your ability to apply for credit and what kinds of terms you will be offered depends on. Paying bills late will always be seen negatively while reduced debt is seen as a positive thing. Paying your hospital bills late is never a good thing. But if you’re struggling to do that, here are a few tips that should help you to eliminate your hospital bills and get a good credit score.
Read More »