If you’re already knee-deep in debt, the last thing you might want to consider is throwing yourself further into a financial sinkhole by taking out a new loan. But wait. Could installment loan debt consolidation get you out of this money muck?
Recent data shows that on average, Americans have more debt than savings. If you fall into this category, a cycle of debt is difficult to get out of. Here’s why taking out an installment loan is a unique way to squash debt once and for all.
It Can Save You Money
Spread out all those credit card statements across your kitchen table –and weep. What else is there left to do when there are so many bills to pay to so many different lenders? Add up all of the interest from each credit card, and you’re left even more overwhelmed.
High-end interest credit cards can cost you thousands of dollars if not paid off on time and in full. If you’re stuck having to pay all of that interest off, it’s not a stretch to say that you might pay twice as much as your original credit card bills are worth.
An installment loan has a fixed interest rate. At first, You might feel that your APR is high when you take out your personal loan (depending on the health of your credit history). But compared to the interest you have to pay on each credit card, your installment loan will likely amount to much less. It’s also worth noting that if you opt for a no credit check loan, it keeps your score from getting worse.
To consolidate your debt, do the following:
- Take out a personal installment loan with repayment terms you can manage.
- Pay off each credit card with the money from your loan.
- Focus on paying off the loan according to your repayment terms.
If you remove debt in this way, you’ll not only save money but also make the debt more manageable.
Installment Loan Debt Consolidation Is Manageable
Credit card debt is one of the worst types of debt you can be stuck with. Credit card lenders subscribe to predatory tactics like fluctuating interest rates, for instance. With a personal installment loan, you know exactly what you’re getting into from the day you sign your promissory note.
All installment loans have an end-date. If you take out a five-year loan for five thousand dollars, for example, the agreement is that you’ll pay off that five thousand dollars over five years in equal monthly installments. You also know your exact interest rate, and as long as you make your payments on time, you know exactly what you’ll pay in the end.
Ending the Cycle of Debt
The above strategy ensures there’s an actual end to your debt. If you take out a loan that you can monitor and pay off over time, your debt will only diminish.
Just be sure not to accumulate more debt. Also, take out a loan with monthly installments you can actually manage.
If you can only manage to pay 150 dollars a month, be honest with yourself and your lender. Take out a loan with a slightly higher interest rate and with a longer repayment plan that actually allows you to pay within your monthly budget.
Ready to Say Goodbye to Your Debt?
It’s time to stop struggling under the weight of your enormous debt, don’t you think? Yes, a plan that involves installment loan debt consolidation forces you to take on a different kind of debt. However, this debt is a means to an end. You could say it’s a healthy debt.
So what are you waiting for? Take that next crucial step and request your loan today. This is the beginning of your path to true financial independence.
Here are some other articles that you might enjoy:
How to Find the Best Personal Loans Nowadays
The Best Unsecured Credit Cards For Bad Credit
What Are No Credit Check Loans and Why Are They Beneficial?
Bonsai Finance Helps People Cultivate Their Financial Health – BadCredit.org