Do you have dozens of bills to pay each month, to different creditors? Does it seem like you are spending more and more time paying bills that you could be using doing something else - like relaxing? Perhaps a more important consideration might be - do you have credit cards or loans that looked like they were a good deal when you first took them out, and now you find that their interest rates have went through the roof? If so, you need to consolidate your debt.
Consolidating your debt means that you take a bunch of small loans or debts and consolidate them into one large debt. By doing so, you will make one monthly payment to one creditor every month.
Get Lower Interest Rates
There are many advantages to consolidating your debt. The most vivid advantage is that you can get a better interest rate than you are paying on current loans. For instance, if the small print on your initial credit card offer gave you a low APR (annual percentage rate) for just the first year, you may now be paying substantially more on this debt than you had intended. The same goes for other loans, such as car and truck loans, boat loans, and others.
Many Student Loans, One Payment
You might also have a stack of student loans with multiple servicers. These student loans can be included in your debt consolidation to streamline the number of bills you pay each month, and save you in interest charges.
Bid Farewell To Your ARM
If you signed on for an adjustable rate mortgage (ARM), you might want to include your mortgage payment in your debt consolidation as well. An adjustable rate mortgage is one that fluctuates with market conditions. Each July 1, your rate can go up or down (usually up). Unfortunately, some people with adjustable rate mortgages now pay double what their initial payment amount was. This has caused a great number of people to go into foreclosure, where they have lost their homes.
To apply for debt consolidation, visit a reputable online lender. You will fill out a secure application where you will list the debts that you have and which ones you want to consolidate. You will be asked to provide employment verification and bank statements. You can be approved in as little as 24 hours for your debt consolidation loan.
Borrow Extra Cash
Most lenders also allow the borrower access to an additional line of credit. If you need to borrow money, doing it during your debt consolidation is a great time because you can have the sum added in with your other debt and included in your new payment amount. Some reasons to borrow additional monies can include home improvement, repair, purchase of furniture or appliances, travel, or education.
By consolidating debt, you not only save yourself a heap of money by getting rid of high-cost debt like credit cards, you also get the added convenience of making one payment each month that encompasses everything that you owe. Debt consolidation can allow you to keep your finances in order while lowering your interest rate so you can become debt-free sooner.
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