These days, more and more people are gaining debts to their names. Because there are different kinds of available loans, credit and debts available to people, each person’s debt just keeps on piling on top of each other as well as the jacked up interest rates and crazy payment schemes. Most people already have debts to their name even before they could start contributing to the economy and be a part of the work force. Education loans are common since going to University is expensive, but even on a loan, it is not really easy to pay off and it would take you a long time to completely pay it off. It is also inevitable that your debt would not only start and end with an education loan.
There are instances when you would incur other debts such as the ones on your credit card, or maybe even when you opt to purchase a new car of your own and along with it gain a car loan, or when it is already time to settle down and have a family, you add more debt on top of it with a housing loan. These loans have different interest rates and payment schemes with different years to pay off. If you want this nightmare to end, the best possible solution is actually to get a debt consolidation loan so that you are left with a single loan repayment instead of multiple ones.
Cheaper Monthly Repayments
With multiple debts and loans to pay off, you are faced with different values on interest. Some may charge a reasonable amount, but most often, credit cards have really high interest rates that really jack up your monthly repayments. When you get a loan to pay off all your consolidated debts, you will only have to face a single interest rate while all of your other debts will already be paid off. In turn, you would on average, have a cheaper monthly loan repayment compared to when you had to add up all your debt payments per month. Incurring a new debt to pay off all of your other debts may be an iffy solution, but it could actually save you on high interest and late repayment penalties.
No Annoying Collection Agencies
One of the downside of having multiple debts is there will be times when you would not be able to pay for all of the monthly payments at a time. Sometimes, you will have enough money left in a month to only pay for one out of your let’s say four debts. With collection agencies, even with just a single month of non-payment, they already get very aggressive with calling you on when you plan to settle your loan for the month – what more if you have three or more people calling you for the month, imagine the headaches you would get from that! By choosing to pay off your multiple debts through a single debt, you would be able to eliminate this. Not only will you lessen the frequency of the calls, but you would also reduce the number of callers to a single collection agency.
Getting Out of The Bad Credit Hole
If you have multiple debts to your name and if you are unable to pay on time or even pay at all in given months, then it will be no surprise that you would already have a bad credit score. Do not be disheartened, though, because you could still actually bring your credit score up even if you find yourself struggling to pay for different kinds of debt. When you get a debt consolidation loan, you could apply with a guarantor and get approved instantly. Once you get approved, you would be able to pay all of your other loans and be left with a single loan that would help you to raise your credit score by making on-time and full payments. What’s great about applying with a guarantor is that if your guarantor has a high credit score, you would be able to enjoy lower interest rates on the loan and even get flexible payment schemes that would be easier for you.
Affordable Debt Management
You do not need to hire an expert financial adviser to help you manage your current debts and get you out of it. You could actually do that yourself, with just a little support from a well-trusted friend as your guarantor. A debt consolidation loan is actually an affordable way to manage your existing debt without the need of hiring third-party advisers. Because your monthly payment would be consolidated into a single repayment, you do not need to scratch your head and get migraines over computation each month. There is no reason for you to have separate envelopes each pay day just to try and save up for each debt you need to pay off. Who knew debt could actually be the answer to your financial problems, right?