What is a Debt Consolidation Loan?
In general, a debt consolidation loan can be defined as a loan that combines multiple debt obligations into one single loan. These loans tend to have lower interest rates than many existing debts. They also allow the borrowers to make only one payment per month instead of many.
- Pays off high-interest credit cards or other debts with low-interest loans
- One easy monthly payment to make
- A closed-end loan will result in a set payment schedule
- May result in lower overall monthly payments
- Establishes good credit history, if paid back as agreed
Things to be Prepared For
- Some type of collateral may be required before approval
- A co-signer on the loan may be required before approval
- Credit score will be a significant factor
As you can see, there are some important factors to consider. If you are struggling with high credit card debt, you first must strive to change your spending habits and learn to live within your means. Setting a budget is the first step, and with Money Management you can know your accounts, track your budget, and watch your spending all in one place.
It doesn’t make a lot of sense to consider a debt consolidation loan if you will be continuing to incur monthly balances on your credit cards. In the long run, you will end up having a higher overall debt balance if your spending behavior does not change.
Is it time to tackle your post-holiday debt and give your budget a breath of fresh air? Our Debt Consolidation loan offers you that chance. Connect with our Loan Specialist today at 503-275-0300 Option 2 to apply today.