In case that you are reading this, you are most likely going through a difficult financial period. Are you finding it hard to fall asleep at night? Do you keep stressing over your financial situation and are exhausted of the constant pressure of repaying multiple debts? If the answer to these question is yes, then you need to know that you are not alone in this. In this article, you may find the information that can lead you to a solution.
Why are many people struggling with their budgets?
Nowadays, it is safe to say that many people are really struggling with debt. Since life has become a lot more expensive, this does not really come as a surprise. We live in a time where people are having difficulties to pay their normal life necessities and regular monthly bills. You would think that in our modern society, having electricity would be a given.However, there are many people who are barely able to pay their monthly electricity bills. And in these times, it is extremely hard for people to sustain a debt-free life for a longer period of time. Even those who are better prepared to face financial challenges, even hardworking people with good jobs are carrying debt for one reason or another.
Different types of debt
There are many different types of debt, and there are different reason why people end up carrying a certain debt type. Although most debt types share similar features, they can also be quite different from one another. A debt can be either secured or unsecured. We have already mentioned that there are various types of financial obligations. Here are some of the most common ones:
Credit card debt
Credit card debt is probably the most common type of debt out there, especially in the United States of America. In fact, many studies showed that many American households are carrying more than $15,000 in credit card debt.
Student loan debts
Student loans are another unsecured type of financial obligation. However, they are quite different from credit card balances. Student loans are often seen as an investment rather than as a normal debt. This is because people do not take out student loans so that they can pay their monthly bills or for an unexpected emergency expense, but they do it so that they can afford their college education. The motives behind this decision are pretty obvious – better education means better career path. However, for many of them, the end result does not really match the investment. For many people, their career paths do not actually offer enough income to allow them to quickly repay their student financial obligations, instead, most of these people continue to repay their ‘investments’ for a very long period of time.
House loan debts
Whether you were born in the U.S. or have won a green card to become a citizen this way, the American dream is usually the same – to buy a house. However, buying a house these days means that you need to accept that you would be in debt for probably the rest of your life. With that being said, having your own home is something that everybody wants and so there are many people carrying house loan debts.
What is the solution?
It is kind of hard to say that the solution is going to be the same for everybody. This is simply because your financial problems are always going to be a bit different from others, so will be the solutions. That does not mean that there are no financial methods and tools that are popular. As with most things in life, the more information you have on a certain topic, the more chances that you will make a better decision. If you are carrying not one, but multiple financial obligations, one of your best options for getting rid of all those debts as fast and easy as possible would be to use a debt consolidation loan.
What is a debt consolidation loan and how can it help?
Debt consolidation loans are one of the most popular methods for consolidating multiple financial obligations. Even though this service shares many similar features with most types of debt consolidation, it can also offer some unique ones. To get a better understanding of what a debt consolidation is and how it works, here is a simple explanation:
- When you take out a debt consolidation loan, you are basically shuffling all of your existing outstanding financial obligations into a brand new, significantly larger loan. Along with the single monthly payment, you will also be getting new terms for your brand new loan. Depending on what your financial situation is, you may be able to secure a lower interest rate on your debt consolidation loan, which is actually one of the most important features that the service has to offer. You will also be able to reduce your monthly payment. As you can see, these can be some extremely powerful benefits. Even having a single payment instead of many can have a huge positive impact on your finances and your everyday life. You would no longer have to keep track of multiple bills on several accounts. Instead, you would be able to only focus on a single payment. That can give you enough breathing space to pay attention to other aspects of your life, as well as to never miss a payment and avoid any possible late payment fees.
Is a debt consolidation loan is the right move for you?
Well, the truth is that with this kind of decision, you can never be too sure. However, there are certain tools that you can use, so that you can get a clearer picture of what your debt repayment will look like if you decide to take advantage of this service. One of these tools is the debt consolidation calculator.
Debt consolidation calculator
Using this financial tool will allow you to easily compare that you are currently paying for all of your existing debts, with what you would be paying if you decide to take advantage of what a debt consolidation loan service can give you.
How does it work?
The calculator works pretty simple, you would need to enter the details of all the current financial obligations that you wish to consolidate. After you have entered the necessary information regarding your debts, enter the terms and conditions presented to you by your loan lending company of choice for consolidating your multiple debts with a debt consolidation loan, and compare the results. That way, you would be able to see if consolidating your financial obligation would actually save you any money or not.