When you find yourself unable to make multiple credit card bill payment and are unable to manage your finances, you can opt for credit card bill consolidation loans to help you pay off your debts. Getting a low interest consolidation loan is a good solution to addressing your outstanding credit card bills and liabilities. But before you opt for this solution, it is important to know what these are and how they can be helpful.
What is credit card bill consolidation loan?
A credit card bill consolidation loan is a personal loan that you take out to pay off your several other credit card debts. For example, if you have dues on four of your credit cards, you can pay them off by getting bill consolidation loan. This would leave you with only one monthly payment each month instead of four.
How to qualify for these loans
Almost anyone can qualify for bill consolidation loans provided you meet the following criteria:
- You must be employed or have a steady source of income.
- You must produce a copy of your monthly budget to the bank to prove that you can repay the loan.
- You need to produce a copy of your recent pay stubs and last years tax return.
Benefits of bill consolidation loans
Credit card bill consolidation loans can be helpful in many ways. Some of them are:
- It reduces your monthly payment – You will be able to reduce your monthly payments to an affordable level as you would be required to make a single monthly payment thereafter.
- It reduces the interest rates – You generally get bill consolidation loans at a lower rate than the rate at which you were paying your debt, so the new loan reduces your interest rates and help you pay off your debts faster.
- It improves your credit score – When you are able to pay off your debts on time, it will have a positive impact on your credit score.
- It makes budgeting easier - As your consolidation loan reduces your multiple payments with a single monthly payment, it makes your monthly budgeting easier.
- Saves your money – With the lowering of your monthly payments, you'll be able to avoid late fees and extra charges as you'll have easier time making your payments
You can contact a financial professional if you want to determine whether credit card bill consolidation loans are right for you.
When you find yourself drowning in student loan debts even before you are able to seek employment and look for legitimate means to pay for your debts, there is one option available that can help you overcome these debts: student loan debt consolidation.
As with other debt consolidation programs, student debt consolidation services are offered by either traditional or non-profit debt consolidation companies. What loan consolidation does is it combines all your existing loans into a unified loan which will then be handled and managed by the lending agency or company. The funds from this consolidated loan will then be used to pay off the outstanding balances on the other loans. Private student loan debt consolidation operates in the same way as federal loan consolidation services available through various agencies (NSL, FFELP FISL, Perkins and HEAL, just to name a few).
If you haven't thought of it yet, here are the top five benefits of student loan consolidation.
1. Extended loan term-This is one of the more important benefits of applying for debt consolidation for your student loans. Federal loan consolidation agencies, such as the ones mentioned above, can offer extended loan terms to stretch the repayment period. If you are not qualified for federal loans for whatever reason, you may consult with any company proving non-profit debt consolidation services as these tend to provide friendlier terms to their clients.
2. Fixed or lower interest rates- Federal Stafford and Federal PLUS loans, to name a few, generally offer fixed interest rates for the entire duration of the loan. As an important note, however, lenders warn against consolidating federal loans and private loans since, if this is the case, the higher interest rates of the private loans will be the one considered by the traditional or non-profit debt consolidation companies in computing for the new rate. Nevertheless, private lending agencies can also renegotiate the loan terms for you and bargain for lower interest rates for the previous loans you took out.
3. Lower monthly payments- With lower interest rates and extended loan term, the logical result will be lower monthly amortizations for the consolidated loan. In fact, depending on how much loan you took out to pay for the existing ones, you may be able to shave off as much as 50% from what you are paying if you added up the individual loan payments you have been making. With lower monthly payments, you can comfortably pay for your debts without sacrificing so many other things that you need for your new life as a professional.
4. Simplified payment process- Once all your debts are consolidated into a single loan, you will now only have to make one payment to the lending agency and leave the rest of the work to them. Now, you no longer need to juggle so many bills, schedules, and deal with harassing phone calls and emails from collecting agencies.
5. Increased credit score- This is, perhaps, one of the most important benefits of getting a student loan consolidation. While you are paying for your debts, you are also effectively working toward improving your credit score. This is because you are taking charge of your debts and are showing a committed effort to repay the previous lenders.
