Debt consolidation is the process of taking many smaller debts and bundling them up into one larger loan. This is usually done to decrease your current fixed interest rate, or to make it easier for you to make your payments by only making one payment a month.
For instance if you have 3 different creditors with [...]
Debt consolidation is the process of taking many smaller debts and bundling them up into one larger loan. This is usually done to decrease your current fixed interest rate, or to make it easier for you to make your payments by only making one payment a month.
For instance if you have 3 different creditors with the following amounts owed, and interest rates: Credit Card $15,000 at 18% APR, Credit Card $3,000 at 19% APR and a car loan at 10%, $10,000, you could get a debt consolidation loan for 8%-9% on the $28,000 you owe. This will lower your monthly interest payment on all loans, and put money in your pocket that you would otherwise be paying out to creditors.
You can apply for a debt consolidation loan very easy, and they can be easy to obtain depending on how good your credit has been since you’ve had these loans. It’s important to remember that you are under no obligation to accept the debt consolidation loan. This is a great option for people that can pull themselves out of debt instead of considering bankruptcy.
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