Top Benefits of Applying for a Debt Consolidation Loan

The Americans have debts and the situation has not improved down the years. According to an article published on https://www.huffpost.com, data by the Federal Reserve shows that the country’s non-mortgage loans skyrocketed to a whopping $3.3 trillion in 2014 and non-evolving credit, especially vehicle and student loans, increased to $2.42 trillion.

Whether you have a vehicle loan, education loan, or credit card debt, all of them have an impact on your lifestyle. If you’re caught in multiple loan payments, things become challenging for you, as you need to juggle between payments every month. Studies show that most Americans are behind payments because they have too many loans to repay. They’re overburdened with debts and plagued with poor financial condition. Fret not. There are ways to manage your multiple debts with a debt consolidation loan.

There are two ways to consolidate loans. The first is balance transfer and other taking out a personal loan. If you have a credit card loan, you can opt for a balance transfer. The process is simple and you need to send a request for the transfer once you have signed up and received a new credit card approval.

You can opt for a consolidation loan that comes with numerous perks. Here are some of the top benefits of the same:

One payment makes your life easy

The debt consolidation process is taking a personal loan to repay your multiple debts each month. This way, you do not need to juggle between numerous payments and keep track of different interest rates and due dates. You manage all of it through a single payment account. There are no worries about deadlines or missing payments.  It will help you to monitor your spending habits and focus on the principal amount so that you can repay all dues as soon as possible.

There is no need to waste time on debt to repay first. On the contrary, you can put aside all of the money into a single account. It will make your life easier and stress-free. In most cases, the amount you shell out every month is much less, because you have more time to repay your loan. Again, if you have a good credit score, you may become eligible for a low-interest consolidated loan than your original debts.

Reduced interest rate

The major issue of numerous small loans is that every debt has an interest added to it for the month. There are interest rates of 29.95 percent per annum on personal loans and 24.95 percent on credit card rates. These interest rates are high and many borrowers fail to pay them on time. It attracts late payment fees or charges for missed payments. There is no doubt about the same.

The situation becomes worse if you miss payments frequently. In such a scenario, additional compound interest is added in the subsequent month due to default in payment. However, when you take a consolidated loan, there are no chances of missed payments because the rate is lower than your other debts. Since all your small loans combine into one, which is a high amount, you pay less every month as interest.

You can pay as low as 9.95 percent per annum if you opt for a consolidated loan. A consolidated loan is, therefore, the best way to pay less and avoid shelling out high rates of interest. Besides, if you want to read more about consolidated loans and ways to avail the same, you can visit websites like National debt Relief.com or similar platforms.

No collection agency calls or emails

One of the greatest benefits of consolidated loans is that you need not fret over collection agency calls. When you have multiple loans to pay off and default, your creditors start pestering you with calls and emails so that you repay as soon as possible. The collection agency calls you multiple times daily, thus affecting your peace of mind at home and work. There is no doubt about the same.

Most of these calls are annoying and stressful. Sometimes, the collections agents may use harsh words that may take an emotional toll on your health. Yes, the collection agents hurt abuses and ugly words to force to pay off your dues.

Taking a consolidated loan will help you pay off all your loans under a single account on time. Besides, you do not need to answer collection agency calls or emails.

Goodbye to stress

When you have debts to pay off, it puts you under financial stress, affecting your physical and emotional health. It leads to stress, anxiety, and depression. The situation worsens when you fail to make the payments every month. With stress, you cannot operate well.

When you take a consolidated loan, you make your payments on time, thus releasing your stress to a considerable extent. Once you start paying off your loans, you feel free and relieved. Soon you get out of all your loans and become debt-free. Once you have no financial worries or creditors asking for payment, you can return to your normal life. Yes, you can shop with your family, eat out, and watch movies during weekends. It is the time to reward you and keep stress at bay forever. A consolidated loan saves you the hassles of multiple interest payments in a single month. Ensure that you do not take another loan immediately just after you have repaid your old debts.

Improves your credit rating

Taking a consolidated loan regularizes your monthly payments, thus improving your credit score in the process. All this while you defaulted, made late payments, paying your bills after the due date, and things like that. All such things affected your credit rating, making it difficult for you to apply for a loan.

A poor credit score also leads to loan application rejection. Even if you manage to approve the loan, you need to pay a high rate of interest. Therefore, pay your small debts with a consolidated loan and improve your credit rating.

Conclusion

Now that you are aware of the benefits of a consolidated loan, make the most out of the same. Pay off your small loans and become debt-free soon.