Having debt can be stressful. Especially when that debt is spread out across a variety of credit cards, personal loans, medical bills, and more. Often, the right course of action is to get a debt consolidation loan and bundle everything into one low monthly payment. In this article, I’m going to outline some of the top things to consider when choosing a debt consolidation loan.
A debt consolidation loan allows a borrower to consolidate various debts into one loan. Borrowers use the loan proceeds to pay off credit card debt, higher interest loans and other debts. Ideally, using a debt consolidation loan will allow borrowers to reduce their overall interest payments and make it easier to manage their debt with it consolidated in one place.
Credit card debt happens. Sometimes it grows beyond what people initially intend. In fact, the average credit card balance was $5,315 in 2020, according to the credit bureau Experian.
As uncertainty spreads, many Americans now face the very real prospect of losing income. One obvious consequence of lost income is it becomes more difficult to meet credit card payment obligations. But there is a silver lining to this crisis: it should become cheaper to qualify for debt consolidation loans. Here are three reasons why.