"When poverty comes in the window, love flies out the door," says an old proverb. Modern divorce statistics seem to back this up, since about half of all divorces are caused by stress over money, mostly because of debt. Yet, a lot of this stress could be relieved if all non-mortgage debts were combined into one loan with a low interest rate. How many couples would still be together if this simple but important step had been taken?
If you have a lot of credit card and loan payments to make every month, you may be feeling the pinch. Every time interest rates or fees go up, you get squeezed a little bit more. When a lot of money goes toward paying off debt, there may not be much left over for basic living costs, let alone savings and investments. With the lowest debt consolidation loan rate available to you, debt consolidation can not only free up a good chunk of your monthly income, but it can also put a time limit on your debt and give you hope for the future. It will also save you a lot of money over the life of the loan, thousands of dollars. What would happen to your finances if you put that money into savings instead of paying interest?
If you have equity in your home, a home equity loan may be the best way to consolidate your debts. But you must be very careful to make all payments by the due date. If you don't, the lender has the legal right to foreclose on your home. In other words, you might have to move.
You will get the next best rate on a debt consolidation loan with a personal loan, whether it is secured or not. If you have good credit and enough money coming in, it shouldn't be hard to get an unsecured personal loan. This is better than a secured loan, since none of your assets are at risk. Most people who want to consolidate their debt use personal loans.
Both home equity loans and personal loans have fixed terms, which means that the debt will be paid off at a certain time. If you make all the payments, you will be debt-free at the end of the loan term. Fixed-term loans not only help right away, but they also give people hope that their debt will be gone in a certain amount of time.
For long-term relief from financial stress, borrowers should also cancel all credit cards and lines of credit once the balances are paid off. This will keep them from getting into more debt in the future.
Because of this, it's also not a good idea to use low-interest credit cards or lines of credit to pay off your debts unless you need to pay for a big, urgent expense that will require several payments. Even though these types of credit may offer a low debt consolidation loan rate, there is a very real chance that you won't be able to pay down the balance and will stay in debt. With a fixed-term loan, you'll be free of debt at the end of the term.
There are many loan options from different lenders that come with a low rate for a debt consolidation loan. By putting all of your debts into one of these loans, you and the rest of your family will get immediate financial help. In the long run, the benefits will be even bigger, improving your financial situation and protecting your family from the stress of debt.
