The merging of several loans into one debt is often associated with a lower monthly payment and an extended repayment period. This is called credit consolidation. When you merge your debts, you reduce the burden of high-interest loans and you will be in a position to manage your loans more efficiently. In most cases due to unavoidable situations, you might end up having a number of debts, which could be difficult to pay back. This is the situation where you need assistance in handling your debts. If you choose to consolidate your debt, you can successfully clear all your debts and move to a better financial position. Combining multiple debts into one big debt requires the acquisition of a large single loan to cover all your small loans.
How Will Loan Consolidation Help You?
When you combine your loans into a single lump sum amount, you will have peace of mind because you will be repaying only one debt. It is quite difficult to follow up with several loans with different due dates and interest rates. In most cases, small debts are associated with high-interest rates and you should combine these debts into a single payment to avoid creditor harassment. Your lender will negotiate with your creditors on a sound plan of repayment. You are required to fill out a simple form on our website and let us deliver the information to the many lenders in our network. Lenders in our network will find a credit program to suit your income level after considering your expenses and other financial commitments. There are numerous benefits of combining your credit. These include:
- Single payment – when you opt to merge your debt,s you will be making a single payment with a smaller amount. Consequently, you will have some breathing space from regular calls and emails from creditors.
- Savings – You will be repaying a loan with lower interest rate, therefore this will save you some money. It is important to come up with a long-term plan to deal with your current financial problems. When you have a plan, it is easier to know what you are going to do with your debts.
- No collateral – a major benefit of unsecured credit is that you are not required to provide any collateral to get the credit. Unlike the conventional credit where you are required to provide collateral such as car, house or any other asset that your lender can claim in case you fail to repay the debt, your assets will be safe when you consolidate your debts.
- Relief from credit cards – having numerous credit card debt can damage your finances because you will not be in a position to deal with debts. It is a known fact that when you repay your credit card installments, you are repaying only the interest and not the capital amount. This increases the debt that you have because you will be repaying the interest without touching the capital amount. However, when you combine your debt you will clear everything plus the capital amounts.
- Quick financial recovery – one of the main reasons why people choose to consolidate their debts is to overcome a cycle of credit. When you overcome this cycle of credit, you will be able to plan well for your financial future.
A Direct Consolidation Loan: Things to Consider
Combining your debts can come in handy if you do not have the cash to deal with an urgent financial capability to deal with your debts. The credit will help you save a lot of money that is associated with small loans with high interest. It is a safe option because you will not put your asset or property on the line. Making separate assessment for every bill or credit that you have can be quite challenging and you can opt to take out a loan that will help you combine all your debt into one. You will be left with one debt that is easy to follow up and the interest rate is manageable. Some of the aspects that you should consider when looking for a debt consolidation plan include:
- Benefits of the previous cash advance: You should look at the merits of your current credit and find a way that will make it easy for you to repay and get back to financial stability. Each loan has its own features which you should benefit you directly.
- Bankruptcy and the current debt you are repaying: Under no circumstance should you consider to declare yourself bankrupt especially if you are dealing with a few debt and you feel that you can repay the debt if you plan effectively. You can consult your lender on the best way that you can overcome debt. With a debt consolidation plan, you will be able to make small monthly payment while clearing your debt on time.
- Extended repayment period: extending the repayment period of the loan does not necessarily mean that you are saving money. In most cases, you may end up paying more because of the extended repayment.
Features of Debt Consolidation Loan
When you opt to combine your debt, you will have to borrow a big loan to cover the outstanding debts. This way, you will be repaying one loan and not multiple debts. Once you submit your information, we will forward to our network of lenders who will finance it. The time taken is usually short because the lenders are here to help you. If you meet the criteria of the lenders, your loan will be disbursed into your checking account. Here are some of the features of debt consolidation:
- Simplicity – instead of dealing with numerous loans, emerging debts allows you to focus on a single loan. You can easily track and adjust to meet the current financial situation, therefore, getting rid of debt quickly.
- Savings – Your lender should negotiate for a lower interest rate that will give you a chance to manage your loan without affecting your lifestyle.
- Reduced obligations – when you choose to merge your debt, you will reduce financial obligations and can easily clear debt without plunging into a cycle of debt.
- Fixed interest rate – it is imperative that you look for a loan with a fixed interest because you will be able to plan your budget. Loans with variable interest rates can throw you off balance because you have to deal with a changing monthly payment.
- Request fees – we connect borrowers to lenders who do not charge for loan request or any upfront charges. This reduces the cost of the loan considerably and when you combine with a lower interest rate, you can repay the loan within a short period.
It is important to note that when you choose to merge your debt, you will be giving your lender the authority to clear the debt on your behalf and you are obliged to make monthly installments for the same loan. Take time to research the loan and determine the total amount of debt and the rate that your lender is giving you.