Do you find yourself struggling under a mountain of debt with no end in sight? Do you have trouble keeping track of your many loan and debt payments each month? A debt consolidation loan is merely a loan that allows you to consolidate — or combine — your debt into one loan. With a single loan, you will have one predictable monthly payment to make, lower payments, and likely a lower interest rate. Here’s how debt consolidation loans can help you get debt-free for good.
Single Monthly Payment
By consolidating your debt into a single loan, you will make just one loan payment a month. That means no more worrying about multiple payments and due dates. This will help you focus your efforts on a single debt to get it paid off faster.
Save Money on Interest
There’s a very good chance that a debt consolidation loan will have an interest rate far lower than you are paying now on your credit cards and other loans. A lower interest rate can add up to massive savings over the life of your loan.
If you’re worrying about your debt every day, other areas of your life are probably already suffering. Consolidating your debt can take a weight off of your shoulders and reduce the stress you’re dealing with.
Secured or Unsecured?
There are two broad types of debt consolidation loans: secured loans, such as a home equity loan, and unsecured loans, which are not secured by property. There are benefits and drawbacks to each option. If you choose to consolidate debt with a home equity loan or line of credit, you are putting your home at risk if you can’t pay back the loan. The term of the loan will also be longer as you may be paying off the balance for 10 or more years. On the flip side, you will likely get a much lower interest rate than you could otherwise. This means you will save more money on interest and you will have low monthly payments. Unsecured loans for debt consolidation are harder to qualify for but you won’t be putting any property at risk. The interest rate will likely be higher than the rate for a secured loan.
You have options to consolidate your debt and finally get debt-free. You can learn more about the benefits of debt consolidation and find out if you qualify by contacting Calgary mortgage broker Gerry Orr at 403.249.9650.