If you skip your credit card payments and have trouble paying your bills, maybe you wonder if debt consolidation could be the solution? We interviewed our partners at Crystal to help you decide if a debt consolidation loan might be right for you.
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Missed or late payments hurt your credit score
A debt consolidation loan allows you to make only one payment a month, rather than making multiple payments to pay off different debts. This simplified calendar makes it easy to manage your payments and keeps you up-to-date with your payments, which will have a positive impact on your credit score. As a result, a debt consolidation loan can help you get your credit score back on track while freeing you from your debt.
The number of payments to make chokes you
Managing multiple invoices can be difficult. In addition, debt repayment can quickly become expensive and unmanageable, especially when interest rates and payment amounts are all different. A debt consolidation loan can be used to repay and consolidate all your debts under one loan. Not to mention that a trusted lender should be able to help you find a payment schedule that fits your budget and lifestyle.
Tip: Try to match your loan payments to your paydays to keep them in check. Or, choose a longer loan term to get more affordable payments.
You must make payments to revolving credit products, such as a card or line of credit
The revolving credit comes with some difficulties. First of all, you never have to repay the loan in full, which means that it is easy to accumulate even more debt on your credit card. Second, lenders only require minimum payments each month. This could take you years and cost you thousands of dollars in interest only to make the minimum payments for your revolving credit products. In such a case, a debt consolidation loan is helpful. The problem is that you have to make sure you find a lender that offers term loans, so your payments stay stable over time. Fortunately, all Crystal loans have fixed term and payments; the payment schedule thus created allows you to keep control of your loan.
You want to repay your debt faster
Consolidating your debts allows you to repay them more efficiently. With a debt consolidation loan, it is often possible to lower your total interest charges, and thus save money and repay your debt faster.
Tip: If you want to get rid of your debts as quickly as possible, choose a shorter loan term and payouts every two weeks.
Want to reduce your interest rate with a secured loan
Do you own a house? Take advantage of the equity in your home by securing your debt consolidation loan. You could save hundreds or even thousands of dollars by lowering your interest rate.
You are interested? The following article explains the difference between a secured loan and an unsecured loan.
If most of these statements match you, a debt consolidation loan can help you get rid of your debts and get your finances back on track. Crystal has helped millions of Canadians to consolidate their debts; visit Fairstone.ca to get a loan quote, how much money you could get and what your payments might be.
Want to know more about debt consolidation? Find out the truth about these common myths about debt consolidation and read this feature article about debt consolidation, which explains what it is and how it works.