Using a Personal Loan for Debt Consolidation
Having a healthy financial life starts with paying off debt and a debt consolidation loan might help.
A lender will give you a single personal loan that you can then use to pay off your other debts with. You will then have to pay a fixed monthly payment to the lender for a certain period of time. The interest rate that you receive on a personal loan will depend on your credit profile.
If you are finding it hard to keep up with different payments then this could be a strategy worth considering.
Taking a personal loan will help to simplify your finances, but it could be one of the more expensive options.
If you do decide to take out a debt consolidation loan then you need to look closely at the fees, the support it offers and if you are able to use a co-signer to get a lower interest rate.
A Loan Vs. Credit Card to Consolidate Debt
If you have good credit then you will be able to apply for a credit card with 0% interest, which can save you money as long as you pay the debt off within the promotional period.
However, the biggest advantage of a personal loan is that it forces you to pay off your debt over time. A personal loan could also improve your credit score as credit card debt is moved over to the installment loan column.
It will only make sense to consolidate debt with a personal loan if the interest rate is lower than what you have on your existing debt or if you are able to pay your debt off quicker.
If you would like to get a debt consolidation loan, head to FinanceMan.