5 Reasons You Need A Debt Consolidation Loan

Why should you borrow more money to fix your debt problems? At first, it might sound counterproductive and like you’re putting yourself deeper down the rabbit hole of debt. For those with medical bills, credit cards at their max limit, and other forms of debt, a loan to consolidate these amounts could be your saving grace.

If you’ve ever wondered if debt consolidation could be an option for you, read on to learn everything about why you need one, how it can help, and what to do next!

What Is Debt Consolidation Loan?

When you heard the words “debt consolidation”, what first comes to mind? Do you think of some sort of magical fix-all solution to make your debt disappear, or do you think of a nice sounding idea that ultimately is a scam to make your financial situation worse? A lot of people get stuck on one of those two mindsets, but it’s actually nothing like that at all.

Debt consolidation loans are designed to help you, not hurt you. It’s easy to get behind on payments and suddenly see your bills racking up fast. When you start to owe thousands of dollars to multiple companies, it’s easy to get frazzled, especially if they’re spread out between several businesses.

You are not alone! Many people suffer from being deep into the hole of debt. That’s why these loans exist! They won’t make your debt go away, but they’ll minimize the effect it has on your life in a negative way and change it to some great positives.

The Top 5 Reasons You Need A Debt Consolidation Loan

There are many reasons that a debt consolidation loan may be what you need, but these are the 5 most common reasons that people seek out this sort of financial solution. It’s important to remember that these loans will only help you out if you make positive changes in your spending habits after getting your consolidation loan.

1.  Payless in interest long-term

All those different percentages and fixed rates really add up. Credit card interest percentages and payday loan interest rates are really high compared to a long-term, high dollar loan. These smaller amounts aren’t meant to take months to pay off, so the interest stays at a high cap to ensure this.

If you fall behind and you’ve got the interest racking up on each of your credit lines, you’d be shocked at just how expensive that starts to run you for. A single loan with one fixed interest rate, or even a percentage, will be far less in the end than keeping all those lines open.

2.  Simplify your life and lessen your stress

Human nature makes us bad at deadlines and due dates, that’s just how we work. As adults, we have so much more on our plates than worrying about due dates for bills that are spread out over the month. Which minimum payment is paid on what date, again?

Keeping track if you have multiple bills due at different times is really rough. Wouldn’t it be nice to condense that all into one payment, once a month, to one company? You won’t forget about it and miss a payment, hurting your credit score, so you’re even doing your FICO scorecard a favor!

3.  You need more time to pay it off

Some credit cards come with awesome little promotions like “interest-free for the first 12 months!” These are great… if you can pay it off on time. What many people don’t realize is that after that time period is up, you’re expecting to begin paying interest on top of what you didn’t pay before.

Yeah, that’s right. They slam with you hundreds of dollars of interest owed the day after your promotion ends. That’s not good for you, your credit score, or you trust in borrowing money. A debt consolidation loan will pay the balance and their interest rates will be much lower than the rates you’d have to pay to your card issuer.

4.  Credit cards are too dangerous for you

Sometimes the devil of an available credit line gets the best of us. When that happens, it can seem impossible to crawl out of the hole, and each time you make progress, you max the balance out again.

Hey, it’s okay! Happens to the best of us. If you relate to this, a personal loan might be your best option. You can pay off your credit card debt, and focus on the loan payments, and they don’t refill for you to repeat your mistakes.5.  Your credit needs some extra help

Did you know that loans help your score? The more variety that can be looked at when it comes to loans, the better you’ll look if you keep them paid off by the due date. Loans show you can handle big dollar amounts just as well as small-dollar and that will greatly improve your score.

Plus, having multiple maxed out lines of credit contributing to your score will hurt it over time. It’s much better to see credit lines open with less spent on them and a loan taking up the largest amount of debt to your income ratio.

5.  Your credit needs some extra help

Did you know that loans help your score? The more variety that can be looked at when it comes to loans, the better you’ll look if you keep them paid off by the due date. Loans show you can handle big dollar amounts just as well as small-dollar and that will greatly improve your score.

Plus, having multiple maxed out lines of credit contributing to your score will hurt it over time. It’s much better to see credit lines open with less spent on them and a loan taking up the largest amount of debt to your income ratio.

Say Goodbye To Your Debt For Good!

You should look at a debt consolidation loan as a fresh, new start. Get everything back to a manageable level of control and continue on with your life a lesson learned. These loans do have to be paid off, but you can take your time and focus on just one bill instead of several.


We will be happy to hear your thoughts

Leave a reply

ten + 16 =

GoodSitesLike