Obtaining a debt consolidation loan is a great way to get a handle on your debt. By combining what you owe into one loan, you only have to pay one creditor, and you’ll get several benefits. This loan isn’t the best option for everyone but it might be beneficial to you.
Here are some benefits of debt consolidation:
- 1. You’ll have fewer payments to keep track of. When you receive a debt consolidation loan, your list of monthly payments shrinks significantly. Instead of having to pay multiple monthly payments, you just need to make one. This way, you'll be able to organize your finances much easier. Rather than making sure that you pay all your creditors on time and juggling their invididual due dates, all you need to do is monitor a single bill and meet one deadline.
- 2. You can save your credit score. If you make late payments month after month, your credit score suffers. But when you have only one payment to make each month, you’re more likely to pay on time, ensuring that your credit score won’t take a dive. Having a healthy and consistent credit score will most certainly lift a weight off your shoulders.
- 3. You pay less money each month. If you choose to consolidate your debt, your lender will try to negotiate lower rates with your other creditors. This way you'll have to pay less money each month. Not only could you wind up with fewer payments, you'll also have a lower bill.
- 4. You’ll get some peace of mind. Being burdened with debt causes stress, anxiety and sometimes, even fear. You worry that there won't be enough money to pay all of your monthly bills. It can be a lot to deal with. If you qualify for a debt consolidation loan, you won't have so much to handle and you'll have less to worry about.
To learn more about what debt consolidation is and how to qualify, feel free to read our other blog posts, “What Does Debt Consolidation Mean?” and “How to Qualify for Debt Consolidation.”