Advantages of consolidating you debts
- What is a debt consolidation loan?
- Things to remember
- Debt consolidation advantages
- Debt consolidation disadvantages
Debt consolidation, lower interest rate advantage
The interest rate charged by a financial institution for a personal loan is usually lower than the rate charged for a credit card. As a result, you will save on interest payments.
Debt Consolidation is all about lightening the indebtness of the individual . A person might have taken many loans from various sources for variety of his/her needs . The loan amounts may differ and interest charged for the loans may differ , So condense all into a single loan is a logical solution.
Creditors will be paid in full!
All your creditors will promptly be paid in full. You have the chance to maintain a good credit rating if you act quickly. Furthermore, you will only have to make a single monthly payment to your financial institution, instead of making several monthly payments to various creditors.
One monthly payment to keep track of
When you select a debt consolidation loan, you have a better chance of ending the process with just one payment to make each month. You can usually structure the due date on the payment to take advantage of the pay dates in your household. It may even be possible to arrange for an electronic withdrawal from an account that you can manage online. In this way, you can transfer funds into the account just prior to the due date so that you will never be in danger of missing a payment or incurring overdraft fees.
Credit rating will remain intact
As long as you follow the terms of your consolidation loan and make your payments on time, your credit rating should not be negatively affected.
Debt consolidation offers stress reduction
Probably the most commonly reported benefit after obtaining a debt consolidation loan is that of being able to reduce worry about how the bills are going to be paid. When you are faced with many minimum payments on numerous credit card bills, it can seem as if you will never be able to get ahead. When you have only one structured payment of a set amount, you can plan ahead, you know it will fit within your current budget so you no longer need be frantic about the danger of being unable to meet all your financial obligations.