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Become Debt-less: How A Debt Consolidation Loan Will Set You Free

Written by Banks Editorial Team

Updated April 22, 2021​

2 min. read​

A debt consolidation loan may be the holy answer for you to save money and pay your debt faster. You can consolidate all your debt into one with more favorable terms, equals more money in your pocket each month. Many times, people who live with debt on a daily basis assume that is their forever reality. They don’t consider a light at the end of the tunnel, a life that isn’t ruled and strangled by the debt they have racked up under their name. However, debt consolidation is a very real reality that can be achieved and properly managed with a little help. At the end of your consolidation, you can even live totally debt free, with a new credit score and future on your horizon.  See how much you can save by refinancing your debt.

Debt Consolidations Loan

According to the U.S. Census Bureau, the average household has $16,425 in credit card debt alone, an amount that has increased by 10% since 2013. Don’t let that statistic get you down. You’re going to be the exception. To become debt-free in 2018, there are a few things you are going to want to consider:

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1. Interest rates are still at historically low levels – for now

However, they aren’t going to stay there forever. The interest rate on mortgage loans is as low as 3.50% and the interest rate on personal loans for people with good credit can be as low as 4.29% APR. If you have credit card, student loan, or other debt you want to pay off, now is definitely the best time. As the economy improves, so will the interest rates, making it hard to pursue debt consolidation.

2. Consider obtaining a loan to pay off the debt

Although this option might not work for everyone, the low interest rates will enable you to consolidate your debts into one loan. Basically, you will be borrowing the money to pay off multiple loans. One monthly payment versus paying multiple bills will make it easier for you to tackle the debt at hand. An unsecured debt consolidation loan can be a great option, and although they may have a higher interest rate than collateral-backed counterparts, you won’t be putting your assets at risk in the mean time. Check if a debt consolidation loan is the right way for you.

3. There’s also debt management plans

Credit counseling services or working with a reputable company that will guide you through your debt repair will also guide you with debt consolidation. They will help you consolidate credit card debt, unsecured personal loans, or medical bills that are racking up unmanageable interest rates. So if a debt consolidation loan may not be you, consider a credit repair instead.

4. And don’t forget a debt consolidation loan

If your credit score or credit report satisfies the requirements, you could obtain a debt consolidation loan, or enter a debt management plan with a much lower interest rate. With a lower interest rate, your monthly payments will go down, enabling you to really get ahead of the debt and become debt free in the future.

5. You can try your own combination, too

You can make a list of your debts, put them from smallest amount owed to the largest, and pay the minimum due on each. If there is any extra money left over, use that money to help pay down the smallest loan amount. Once that’s paid off, move onto the next loan on the list, and continue the process until all your debts a re paid in full.

Now is the time to become debt-free.

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