With the rising cost of living and uncertain economy, it is inevitable to live on the edge of your financial plan. You end up taking up several loans. With high-interest rates and lack of finances; you are unable to pay the loans. Do not worry, Debt consolidation is the loan just intended for you. Debt consolidation integrates all the loans into one enormous advance with low-interest rates. Debt consolidation allows you to make only one monthly payment. Debt consolidation brings you a sense of relief and helps you manage the escalating interest rates.
There are four types of debt consolidation including the unsecured loan and secured loan
The unsecured loan does not require a collateral placement. It is suitable for tenants. The unsecured loan though has high interests rates. The secured loan requires a placement of collateral. It can be a car or property. The advantage of this loan is that you can borrow more money, it has a low-interest rates and extended repayment period. Failure to make the payments, the collateral placed will be held.
Credit Card Balance Transfers
This involves moving all the credit card balances from various cards into one card. The interest rates are low.
Personal Debt Consolidation Loans
You can take a personal loan from the financial institution and pay with it all the other debts.
Home Equity Loan
Here you use your home as security. This loan is risky because you can lose your home if you fail to pay the loan.
The debt consolidation application is easy. You research on the best loan that suits you. Go to the financial institution website. You fill a form with your details and forward it to the creditor. They counter check your details and see if you qualify for the loan. If you qualify, an email confirmation is sent to you then the money is deposited in your account. You must be 18 years and above to qualify for this loan, have a bank account and a consistent source of income.
The benefits of debt consolidation
- Easy application you can apply for it at the comfort of your home
- Lower interest rates
- One monthly payment- this saves time and the stress of dealing with several creditors
- Keeps bankruptcy away
- Decreased monthly payments
Debt consolidation brings a breath of fresh air to your spiraling debts, however, use it wisely less it fails to fulfill the purpose it is intended for, sinking you further into debt. By all means, learn to manage your finances well and live a debt free life.