How a debt consolidation loan can get you on the right track
Bringing certainty during uncertain times
We can all relate to how recent world events have brought a level of uncertainty to our everyday lives. A job loss, reduction in hours or changes in financial circumstances can add up to stress and hardship. If you are grappling with debt from different sources and unable to make regular payments on time, then a debt consolidation loan could benefit you and bring about greater certainty and a path forward to get debt free sooner.
Here are 5 benefits of debt consolidation:
One easier to manage fixed monthly payment
It can be difficult to manage different loans and credit cards debts with varying interest rates and different due dates. Unless you have payments scheduled, it’s easy to miss one and have your creditors on your back for late payment. This can also have an adverse effect on your credit score if you are defaulting.
With a debt consolidation loan, you know how much you need to pay each month which helps you to manage your budget better. You also have an end date in sight of when your debts will be fully repaid.
Lower interest rates
Having a number of small debts with different finance and credit card companies can add up to higher interest payments and compounding interest charges the next month if you miss a payment. By consolidating your debts into one larger amount, you are likely to be paying a lower interest rate overall and as a result you will pay your debt off sooner.
Improving your credit score
Your ability to pay off your debts on a regular basis determines your credit score. The benefit of having your debts consolidated instead of having multiple debts means that if you can pay a manageable amount every month, this will have a positive effect on your credit score as you will be seen to be a responsible borrower.
Feeling more in control
There’s nothing better than a tidy up at home, or getting up to date with your “life administration”. A number of us did exactly that during lockdown when we had a chance to pause and take stock. Debt consolidation works in a similar way, giving you back control by reducing stress and not having to waste your time juggling multiple payments. You also have a goal set for you to pay off your debts sooner which in itself puts you in control every month.