Debt Consolidation Loans: are they the right answer?
Every decision has its pros and cons, its upsides and its downsides. Weighing these options and consequences can be scary especially when it comes to your finances and your credit. This is also very true when it comes to considering debt consolidation loans.
First of all, a debt consolidation loan is when you take one loan to pay off several other debts. This is beneficial if you are facing many higher interest rate debts on your credit cards. So now instead of several smaller loans you have one lump payment each month.
Other debts that can be consolidated into one of these loans, aside from credit cards include, student loans, car loans, etc. Having just one payment to worry about each month can make it easier for you to avoid late payments, and avoid fees and extra charges and the dings against your credit score.
However, it can be tricky to find these loans with fair interest rates. If you already have high interest rates on any of the loans, getting another loan with similar rates would be very beneficial to you. As well as the possibility of having to take twice as long to pay off these loans, consolidating doesn’t mean that the amount goes down or away. You are still responsible for the amount owed.
Watching the term or length of the loan is the key factor. If the rate is lower by half, but you are taking twice as long to pay it. You are still paying the same in interest. When choosing a rate, a loan length and other factors remember to take out your calculator and figure out exactly how much savings is happening if any at all.
Are debt consolidation loans right for everybody? No they are not. Each individual’s situation is different as is the answer to the question: Debt consolidation loans or not? If you are having a hard time deciding which course of action is right for you then your best bet is to seek out professional assistance or advice. There are many companies out there, however not all of them care about what is best for you. The people at Consumer Credit of America have been assisting people for over 15 years with this decision. Let them help you with yours.
This article was written by Makenzie Wayne. Financial advice is only good when it comes from the people who care, get your credit counseling or credit card consolidation from the people who care the most at www.ccofamerica.com or call toll free at 800.955.5765
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