Managing Personal Debt: Get a Consolidation Loan to Pay Off Debt

By | June 8, 2017

Managing personal debt is relatively easy when a family has very few active credit agreements. Should this situation change, it could lead to overly complex personal finances, late payment charges, additional interest accruing or even serious financial difficulties. Paying off credit card debt, car finance, small unsecured loans and miscellaneous household bills with a debt consolidation loan could provide a way to avoid such problems from ever occurring.

Reduce Interest Payments with a Loan to Consolidate Debt

A cheap consolidation loan means that less interest will be paid each year. A survey by the FINRA Investor Education Foundation revealed that 36% of people didn’t know what the APR was on their primary credit card, let alone the others. Given that the Federal Reserve’s G.19 report showed that the average rate of interest was 14.67%, the amount of cumulative interest being paid could be substantially reduced with a low rate loan to pay off debt. This is provided that the term of a loan for debt consolidation is kept to a minimum and revolving debt is managed sensibly in the future.

Managing Personal Debt with a Cheap Consolidation Loan

There is little doubt that the greater the number of active credit agreements, the more difficult they are to manage. It is incredibly easy to forget to pay or even settle the balance a day or two outside of the grace period. According to the National Foundation for Credit Counseling, approximately 58 million Americans (26%) failed to pay their debts punctually. This figure rose to 51% among the African-American community. Managing debt with a loan and making a single, affordable monthly payment can dramatically simply personal finances and lead to fewer mistakes being made.

A Low APR Consolidation Loan to Pay Off Debt Requires Good Credit

A slightly better credit score will lead to a lower APR on a loan to consolidate debt and any savings realised will make managing personal debt easier. Bad credit repair can take months, but there are credit history repair tips that can be used to quickly optimise credit scores. One of the most effective ways to achieve a higher rating is by eliminating credit report errors personally or with the help of a credit attorney.

Managing Personal Debt with a Bad Credit Loan to Pay Off Debt

Although bad credit debt consolidation loans are still widely available, it is advisable to take steps to improve credit before submitting an application. It is also important to take into account that lenders regard adverse credit customers as representing a greater risk and charge a higher rate of interest. Although managing debt with a poor credit loan for debt consolidation will simplify finances, it could prove to be more expensive than existing forms of credit. It is important to consider whether a debt free solution, such as an unsecured debt settlement program, offers a more viable alternative.