A lot of stress and worry can come from having too much debt. If you're having trouble making the minimum payments on all your bills, a debt consolidation loan might help, but there are some things you should think about first.
A debt consolidation loan is basically a loan for the total amount of all your outstanding debt, like car loans, credit cards, store credit, etc. This money is used to pay off all your high-interest debts, so you only have to make one payment, which usually has a much lower interest rate.
Before you decide to get a consolidation loan, there are other ways to deal with your debt that could help.
- Ask to have your interest rate lowered.
Most debts have higher interest rates than credit cards, but often all you have to do is call and ask for a lower rate. There are a lot of credit card companies that want your business, and if you call the one you already use and ask them to match the rate of another company, they will do it 9 times out of 10.
- Learn how to deal with debt better.
Instead of taking out a loan to pay off your debt, you might just need to learn how to handle it better. There is a lot of free information on the internet, and most cities have non-profit groups that can help you figure out how to handle your debt.
- Bank Loans
If most of your debt is on high-interest credit cards, you might be able to get a loan from your bank to pay off all of those debts at once. You might not need to take out a single loan to pay off all your debt. Instead, you might be able to combine all your credit card debt into a single loan with a lower interest rate from your bank.
Debt consolidation can save you a lot of money on interest, and it can also make it easier to find the money every month to pay off all your debts. This could be the answer you're looking for if you have a lot of debt.
