Take advantage of debt consolidation loan
Debt consolidation is the process of combining all your existing debts into one single loan with convenient repayment terms. Rather than making multiple payments in a month, you only have the obligation of making one single payment. For individuals who want to control their finances, consolidating your debt can be the best decision. A considerable number of borrowers find themselves in a debt cycle making it difficult to get out of such a distressing situation.
Debt consolidation is among the best ways to ensure that you live a stress-free life again. Several financial institutions, including Chase, offer debt consolidation programs. This can be in the form of a home mortgage debt consolidation or a credit card debt consolidation. In the student loans consolidation program, you will be required to save money over the lifespan of the debt. After graduation, you will only be remaining with a little amount to pay back. This allows you to build a good credit history while still in school. One notable advantage of debt consolidation loan Chase is that you will incur less interest rate in a debt consolidation loan compared to several existing loans.
Debt consolidation offers by Chase
There are two Chase bank loans for debt consolidation. These include credit card loans and home mortgage debt consolidation. With these types of debt consolidation packages, you don’t need to issue a new collateral besides what you initially provided. This makes them the best debt consolidation loans among consumers. However, individuals have to meet certain criteria for them to qualify for a debt consolidation loan.
The main reason why people take out debt consolidation loans is to pay off multiple loans and remain with one lump sum amount which can be paid at a relatively lower interest rate. While the lump sum amount is still a loan, it will be easier for you to track your monthly payments compared to owing multiple creditors. After you apply for a debt consolidation loan Chase, your existing loan will first have to be verified. After that, the loan is transferred from your current creditors to Chase. The loan is then paid off to your creditors for you to remain with one Chase loan that can easily be managed compared to paying loans to different financial institutions.
What are the benefits of debt consolidation?
Debt consolidation has several advantages. Mortgages and credit card debts have different benefits to the borrower. In the case of credit card debt, your credit cards will be consolidated into a single account. A new account, holding all your old credit card loans will be created. This means that all your existing credit card loans will be wipes in one swoop. The interest rate incurred in a debt consolidation loan is also less compared to having multiple credit card debts. Additionally, your monthly payments will reduce. With a single card, it will be easier for the borrower to pay off their credit card debts.
When it comes to mortgage owners, the benefits are almost the same. It is possible for homeowners to take out a home equity loan, which is a second mortgage on a home. Banks have different requirements but home equity loans are mainly used for home renovation. This money is usually loaned by a second bank. Chase also has home mortgage debt consolidation programs.
In most financial institutions, you will be required to pay some fees which include the closing costs. The fee has to be paid before your debts are consolidated. After debt consolidation, your obligation will only be limited to Chase. All the paperwork, transactions and procedures will also be taken care of, although there are other procedures that have to be handled by the borrower. With Chase, the new interest rate and loan terms are negotiable.
How debt consolidation works
If you consider a debt consolidation loan Chase, you can apply at any of their branches. The application process is the same in every branch, but the way a credit card debt consolidation is handled in slightly different from a home mortgage loan consolidation. Your credit score is a major consideration for a debt consolidation loan. Borrowers with a high credit score have higher chances of being approved. The interest rate offered also depends on the credit score of the borrower. If you have a high credit score, the interest rate paid on the loan will be lower. You will pay a high interest on the loan if you do not have an attractive credit score.
Besides the credit score, your debt- to- income ratio is also another consideration. Before approving a debt consolidation loan, the bank will calculate your total debt consolidation and annual salary. It is important that you include all sources of your income besides the salary in this calculation. This acts as proof to the bank that your income is sufficient enough to pay off the loan. Regarding mortgage debt consolidation loans, the house type will also be considered. If you own a single or double wide trailer house, you may not qualify for debt consolidation.
How to qualify for a debt consolidation loan
After you submit your application at a Chase branch, your documents will be reviewed. You will be directly contacted in case a clarification is needed on the information you present. If you qualify for the loan, all your credit card balances will be reduced to zero. But you will have to sign additional documents for mortgage consolidation. In both cases, all the complicated processes including the paperwork involved will be handled by the Chase. Both the application and approval process takes less time, and the decision will be made after a few days.
Should you consider debt consolidation?
Consolidating debt can actually be the best option if you want to pay off your credit card loans and have your monthly payments manageable. But before applying, it is also important to consider if consolidating your debts is the best option for you. By consolidating multiple debts, you will only make a single payment every month and it will also be easier to monitor your new loan. By understanding how the debt consolidation process works, you can easily decide whether it is the best choice for you.
Other ways you can use to manage your debts include;
Communicate with creditors
If you have challenges paying of multiple debts, it is important that you maintain communication with your creditors. You can directly call before missing a payment. You may also inquire if they offer financial hardship programs to give you a temporary relief. Ask if they can allow you to make smaller monthly payments. If the creditors are not willing to work with you, you can seek help from a debt relief organization. This can be either a debt settlement firm or credit counselling firm.
The bottom line
For individuals who are trapped in a debt crisis, a consolidated loan can be the solution. But this can only work if you avoid taking more debts. If you have a very high loan amount or you don’t qualify for debt program, a credit counsellor can help you find other options to suit your needs.