Debt Consolidation For Beginners

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None of us ever thought that 2020 would be the year that time forgot or that we’d spend most of 2021 trying to figure out a way to escape the stranglehold that the previous year had tied us up in. We’ve spluttered and staggered our way through the last eighteen months, and most of us have just about managed to cling on by our fingertips. 

Between the fluctuating labor market and the uncertainty about what tomorrow would bring, the rise in national credit card debt has been sky high, and trying to manage all of the outstanding everyday payments that you have to make along with what you had to put on your cards just to scrape by… Well, it isn’t easy.  

We all know how difficult it is, and millions of Americans are in the same economic boat as you are. Trying to figure out which payments to make each month and which you can skip without having to worry about the effect that it might have on your credit rating and financial future is enough to keep you awake at night, thinking about and dreading the worst. 

But there is an easy solution to the problem, that can help put all of your financial eggs in one basket and consolidate your debt into one handy, easy monthly payment. And the answer to all of your financial problems and the way to sleep fitfully and easily again is a consolidation loan. 

What Is A Consolidation Loan? 

A consolidation loan is a single, all-encompassing loan that’s designed to help you pay off your existing debt more easily and efficiently than you would be able to without it. We know what your next question is, and we’re already prepared for it. How does it work? It simply allows you to pay off all of your debts, including credit card payments and outstanding loans and finance, by consolidating or gathering them together in one easy, monthly payment. 

The problem with having a number of outstanding debts, whether they’re payments, loans, or finance, is that they’re all due on different days of the month, and they’ve all been saddled with different interest payments. And trying to keep track of how much you’re actually paying and when you have to make the payments can be a Herculean task which most of us fail at some point during our lifetimes. 

With a single consolidation loan, you’ll know when the payment is going out, how much the payment will be for, and the interest percentage that you’ll be paying. You won’t have to rush around and continually scramble to try and make a bunch of payments at different times and for different amounts, all you’ll have to think about is making a single payment once a month, every month. 

And the best news about combining all of your debt into a single payment is that as long as you make that payment month in and month out, you’ll never have to worry about your credit rating again. Why would you? There’ll be no bounced or missed payments that could send it crashing through the floor. 

Reasons For Combining And Consolidating Your Debt 

While we’ve already explained why a consolidation loan is a good idea if you have multiple debts and are beginning to fall behind on payment schedules or sometimes end up missing them because of the shifts that you have to work and are desperately trying to squeeze every last cent out of a paycheque that doesn’t go as far as it used to, there is one major advantage to securing a consolidation loan. And that’s your credit rating. 

Everything is dependent on your credit rating and trying to ensure that it remains in the red and doesn’t plummet into the black. If you want to move and apply for a new mortgage, or want to replace your car with a newer model and want to secure a finance deal for it, the first thing that your finance company and mortgage provider will check is your credit rating. If you’ve missed payments because you can’t keep track of all of your debts, then they’re going to show up on your credit rating and seriously affect the chances of you being approved for any future finance or loans

But with a single monthly payment that you can easily monitor and pay, you’ll be able to keep your financial future on track by ensuring the safety and security of your credit rating.   

One Last Thing… 

Consolidation loans aren’t for everyone, and as tempting as they might sound before you decide to take one out, speak to a financial advisor. Explain your debt situation and tell them about the payments you need to make and they’ll be able to tell you whether a consolidation loan is a right option for you, or if there’s another equally effective loan or payment plan that you should adopt. 

Interesting Related Article: “Good Debt vs Bad Debt – What’s the Difference?