Posted: 30 Apr '18

Manage Your Money: How Debt Consolidation Loans Can Help You Get Out of Debt Faster

If you're finding it difficult to keep up with multiple credit card or loan payments, it may be time to consider a debt consolidation loan. Here are three ways that debt consolidation loans can help you reclaim control of your financial situation and pay off your debt faster.

Consolidated Payments

Debt consolidation loans combine all your credit balances into a single monthly payment. Not only does this make tracking and paying your debts easier, but it can also help you budget more effectively, thus increasing your monthly cash flow. This type of loan will also allow you to choose a repayment schedule that suits your needs. You'll still have a minimum monthly payment to meet, but you can choose to pay more whenever your budget allows.

Lower Interest Rates

Debt consolidation loans allow you to take advantage of lower interest rates which, over time, will help you pay down your debts faster. Since more of your monthly payment will be applied to the principal portion of your debts while your interest rate remains fixed, you can expect a shorter repayment period than you would be facing if you chose to pay off each balance individually. Generally, the interest rates on debt consolidation loans can be locked in for anywhere from 1 to 5 years.

No More Missed Payments

Making late payments or defaulting on high-interest debt can negatively impact your credit score, even if you manage to eventually pay the debt off in full. Not only do debt consolidation loans help you avoid damage to your credit rating, but they can help you improve your credit score over time. You'll also avoid late payment fees and penalties, both of which can make an already constricted budget more difficult to manage.

While debt consolidation loans may not be the best solution for everyone, there are clear advantages to consolidating all your monthly payments into one easy-to-manage monthly bill. Our lending specialists can help you determine whether a consolidation loan is the right choice for you. Contact us today to learn more about how debt consolidation loans can help you meet your monthly financial obligations.