Thanks to the Recession back in 2008, debt in America is still rising. Consumer debt is over $1.3 million. The average credit card debt per household is $5,000.
The total average of debt, when combined with everyone, including those with no debt is currently $139.5 thousand per household.
Being in debt feels overwhelming. It’s scary and it’s frustrating. It can make you feel as though you’ll be burdened with debts for the rest of your life.
But there is something you can do about it. A debt consolidation loan might be exactly what you need to get your finances back in order.
Here’s what you need to know about a debt consolidation loan.
How It Works
Debts can accumulate from a variety of different sources. Perhaps you have an auto loan for your car.
Then there are the two or more credit cards which have been carrying balances for several months now. Paying the minimum monthly payments leave you with very little cash.
The high-interest rates make it nearly impossible to even make a dent in paying down your balances. It’s hard not to feel as though you’re in a rut.
But there is a solution. You can get a debt consolidation loan. This means you take out one single loan. You then use that loan to pay off the rest of your debts.
That leaves you with only one loan payment each month.
The Benefits of a Debt Consolidation Loan
There are several benefits to a debt consolidation loan. Let’s take a look at them.
Lower Interest Rate
When you carry several loans, your interest rates all vary. There’s a good chance most of them are pretty high as a result of the Recession.
Having to make debt repayments to several sources makes it more difficult for you to manage. It’s easy to spiral out of control when you’re dealing with the different rates.
Consolidating your debt with a loan may help you see your overall interest rate lowering. That means you have more money to help you pay down your loan.
By consolidating your debt you may also be able to save more money for the duration of your loan.
You Can Take Control of Your Finances
There are few things more stressful than feeling out of control with your finances. When that happens, it’s incredibly easy to start making bad decisions because you feel panicked.
A debt consolidation loan can help you regain your power and help you feel like you’re back in control. You’ll also find your stress levels are reduced and it’s easier to make smart decisions regarding your finances.
With one loan, it’s easy to keep track of when you owe money. You can plan ahead and stop worrying that you’ll miss a due date.
It’s also easier to create and maintain a budget when you only have one loan to worry about. You can even set it up to automatically pay that loan every month so you don’t have to worry about forgetting to pay it.
With this type of loan, it’s easier for people to finally glimpse what life without debt looks and feels like.
Improved Credit Score
There are many factors that can negatively affect your credit score. A lowered score makes it difficult for you to obtain new loans, get a mortgage, or even rent a home.
It’s important to keep your credit score as high as possible, especially when you’re in debt. Which is why a debt consolidation loan can help.
Rather than wondering if you have the money to pay the minimum amount on all your loans, you would only have one loan to worry about.
That makes it easier to budget and you’ll often find you have more money to pay down your loan quicker. That means fewer or no late payments.
Late payments negatively affect your credit. They also cost you more money as a late payment fee is often tacked on to the already high debt amount.
Getting a consolidated debt loan means you can clear out your outstanding debts sooner. Then you can begin the process of building back up your credit score.
Less Stress To Handle
66% of all employees report they find it difficult to focus at work because they’re stressed. Loss of work due to stress costs the American businesses $300 billion each year.
Losing work because you’re stressed won’t help your situation. Rather, it will make it worse.
Stress affects your physical health. But it also affects your mental health.
Bad decisions are made and things tend to get worse. If your health is affected too much by stress, it could mean more financial hardships in the future.
Take care of yourself. Make sure you get plenty of rest, eat healthy foods, and exercise regularly. Do things to help reduce your stress levels.
A debt consolidation loan can help you reduce your stress.
Once you only have one loan, you’ll find you feel more relieved. You’ll probably find that not hearing from creditors makes life easier and far happier.
You may feel a sense of freedom you haven’t felt in awhile.
No More Collection Calls
Sometimes, your debts can grow too large and you can’t make payments on them. It’s not that you don’t want to pay, it’s that you can’t.
You simply don’t have enough money.
That’s when creditors turn your debts over to a collection agency. Then the calls begin.
Collection calls are unpleasant. They tend to call at the worst times, like during a family meal.
Those calling from a collection agency seem like they’re relentless. And they don’t care what problems you’re having.
When you take out a debt consolidation loan, there are no more collection calls. Instead, there’s just one monthly payment that you can now afford.
Easy to Manage
Another great thing about a debt consolidation loan is that there is more than one plan to choose from.
It’s easy to manage your consolidation debt loan online. You can easily view the credit plan details and your balance.
It’s also easy to make additional payments to help pay down your loan more quickly.
How to Request Information
Before you request information for a debt consolidation loan, you’ll need to gather some basic personal information first. You’ll also need to know the dollar amount of the loan you’re requesting information for.
You also need to supply information regarding your source(s) of income. That means you’ll need your banking information.
You will need a checking account to make the deposit if you’ve been approved.
Based on the information you provide, the loan company will sort through all of their offers. If approved, they will then prequalify you for a loan that fits your personal needs and situation.
You will then be prompted to complete your review on the lender’s website once you’ve viewed their offer.
Things To Be Aware Of
Always do your homework thoroughly before you accept the terms of any debt consolidation loan. You need to have a good understanding of the terms and conditions so the loan works for you rather than against you.
Remember that your debt consolidation loan may have a longer term. This means you may end up paying more interest in the long run than you are with your current debts.
If you choose to consolidate your short-term debts as well, such as debts you’ve run up using your Macy’s and Nordstrom cards, it might take you even longer to pay them off entirely.
Check to make sure whatever plan you take that your debts are paid off as quickly and cheaply as possible.
When you consolidate your debts, you’ll have more money available to you. Do not get yourself into further debt by taking on more credit.
Learn from your current mistakes and get yourself out of debt. You deserve to live life fully and freely.
Make sure you understand all of the costs involved before you take on another loan.
Why You Should Work With Us
We realize that personal finance is confusing. That’s why it’s our goal to be the best resource for people looking to answer their financial questions.
We want to help you solve your financial problems. We do this by providing relevant information, news, advice, and tools.
You also have access to the best offers available for your financial needs. We also want to make our company your go-to site for all your financial needs.
We know that gaining control over your finances takes time. We’re here to help you at each step of the way.
But first, you must decide whether a debt consolidation loan is the best choice for your needs. We can help you make that decision.
To help you get started, click here to submit a request.