Debt Weighing You Down? Utilize a Debt Consolidation Loan
Debt can be a tremendous burden for those that have more of it than they can handle. Falling behind on payments, collection calls, and having very little pocket change can ravage family relationships and people's self-esteem. When you are stressed and don't know where to turn the whole family suffers.
If debt is the cause of your woes, you are in luck; there are many options for you to stop the collection calls and anxiety that comes with them today. Think about a debt consolidation loan.
What is a Debt Consolidation Loan?
To put it simply a consolidation loan is a loan that you take out to pay off all of your debt. Once your debt is paid off, you have just one payment for the loan. This will help you to get organized and have a better understanding of your financial responsibilities each month. Debt consolidation loans also help you lower the amount of money that you will pay out over time to lenders.
Pros of Debt Consolidation Loans
- The household budget is made easier - one monthly payment.
- Lower interest rate.
- No more creditor phone calls.
- A chance to negotiate smaller monthly payments by extending the time you have to pay the debt off.
- Will help to improve your credit score. Lenders will have been paid, and as long as you keep up with your consolidation payments, your credit will get better.
Cons of Debt Consolidation Loans
- When you take out a debt consolidation loan, you have less of a chance of getting forgiveness on any of your owed balances. It will be up to you to negotiate with the company you owe money to.
- You could end up with more debt than you started with. This can happen if you encounter early payment penalties or take out a loan for more than you need.
- The alternative to a loan is debt settlement. Using a debt settlement company, you will likely be on the hook for less than you owe now. The company will negotiate with your lenders to reduce the balances you owe. Debt settlement will, however, lower your credit score significantly and if you are paying off debt to buy a home, it will be counted against you.
If you are able to obtain a consolidation loan, that is the best way to get you through this stressful situation. A loan will undoubtedly make life easier, and it will allow you to borrow more easily in the future.
BMC Mortgages can help you make the tough decisions when it comes to debt contact us today!