Do you feel like you’re drowning in debt? Whether you’re worried about ballooning credit card balances or falling behind on your mortgage payments, a debt consolidation loan option could help you improve your financial situation. Here’s a closer look at the key benefits of this service, which allows you to combine several unsecured debts into a more manageable loan.
Only One Payment
For many households, one of the biggest factors that can cause credit payment issues is the sheer number of accounts that need to be managed! It’s all too easy to forget about your credit card bill when you have an auto loan due the same week.
With debt consolidation, this is no longer an issue. Rather than making several payments throughout the course of the month, all of your debt from these associated loans are combined into a single account. You only have to make one monthly payment, which makes it far easier to stay on top of your financial responsibilities.
Lower Interest Rates
Interest rates on credit cards and other loans can be surprisingly high, causing your unpaid debt to increase dramatically even if you’re actively trying to avoid spending money. Depending on the type of loan you qualify for, however, your new terms could actually lower your interest rates and/or your monthly payments.
By lowering the rates associated with your unpaid debts, you’ll be left with more money each month to handle other necessary expenses. Greater financial flexibility ensures you can still live a comfortable lifestyle as you pay off your debts.
Minimize Property Risk
There are two types of debt consolidation loans: secured and unsecured. Though most people who need this type of financial assistance will only qualify for a secured loan, those with a stronger credit history are sometimes able to qualify for an unsecured loan.
With this type of loan, your property and other assets aren’t at risk if you find yourself unable to make payments. Keep in mind, however, that unsecured loans typically have higher interest rates, which can lessen the potential impact of the other benefits typically associated with debt consolidation.
Whether you elect to go with a secured or unsecured debt consolidation loan, there is no denying that coming up with an actionable plan will provide much-needed peace of mind as you take on your debts. By using debt consolidation to regain control of your financial situation, you will be better positioned to manage your family’s needs and secure a brighter future.