Lower Interest Rates

For people who may have many high-interest debts such as credit cards or personal loans, debt consolidation is a helpful tool in repaying a loan. Debt consolidation loans give you the ability to combine multiple debts into a single new loan, assuming this loan will have a lower interest rate and monthly payments. It has been found that debt consolidation through these types of loans has several advantages.

Single Monthly Payment

Debt consolidation simply involves taking out one loan to pay off all other debts; it frees one from having to remember 5, 10, or more minimum monthly payments to different creditors. This makes the repayment process simple whereby instead of paying multiple installments, the borrower pays just one personal loan to the new lender. It would also be easier to make one payment per month and more manageable financially instead of making many payments within a month.

Set Repayment Term

Unlike installment debts like credit line, credit cards and other revolving debts come with no fixed terms and if one only pays the minimum amount required monthly, then he or she can spend the next fifty or more years paying off the debts. Consolidation of debt involves coming up with a debt consolidation loan where you get to decide repayment term, which ranges from 2-4 years. It provides you with a clear indication of when the debts would have been paid and thus been cleared.

Pay Off Debts Faster

Since consolidation loans have predictable monthly installments, low single-digit interest rates, and a fixed repayment period, this plan enables people to eliminate debts much faster than if they settled for credit card minimum payments. Not having much in credit card debt, the goal of possibly being debt-free in a few years also helps to alleviate the load.

Steps to Consolidate Debt

1. Research Lenders and Options Evaluate the interest rates and fees charged to identify the best loan.
2. Check Credit Score and Income Determine if you meet the set requirements for pre-qualification.
3. Fill in a Debt Consolidation Form Have information such as income, amount of money owed, credit records, and employment details ready.
4. Apply Online Loan limits may vary depending on the loan type, from $1,000 to $100,000.
5. Pay Off Individual Debts The lender pays your creditor directly, so you have no dealings with the creditor throughout the process.
6. Begin New Monthly Payment Start paying the new consolidated monthly payment for the length of the fixed loan repayment plan.
7. Ensure No Outstanding Loans Have no other loan outstanding when the new term for repaying the new loan begins.

For individuals who have taken personal loans, car loans, or other high-interest loans from different lenders, debt consolidation can make it easier to pay back the loans. Only borrow as needed, research lenders thoroughly, and prepare a plan for future payments. If well used and for the right times only, debt consolidation loans are a good form of economic rescue.

Ready to consolidate your debt? Apply now with EZ Loan and simplify your financial life!