Americans have an average of $6,000 in credit card debt. College students graduate with at least $30,000 in student loans. A debt consolidation loan from a lender can help you regain control of your expenses. Here are some things you should know about debt consolidation.
Debt Consolidation Process
A debt consolidation lender, such as Symple Lending, can help you find the debt consolidation loan that meets your unique needs. You can take control of your debt repayment in five simple steps:
- Calculate every debt you have – student loans, credit cards, vehicle loans, medical bills, and home loans.
- Determine which loans you want to consolidate based on interest rate and repayment length.
- Apply for a debt consolidation loan.
- Continue paying bills until you have verified that the original lenders have received the payoff amount.
- Start making payments on your debt consolidation loan according to the repayment terms.
Advantages of Debt Consolidation
Many people enjoy the advantages of debt consolidation. First, it typically lowers your overall monthly payment. This savings allows you to save for other expenses.
Second, your average interest rate is often lower. Interest rates vary based on your credit rating, but if you consolidate credit card bills, you may save more on interest rates. Your money goes toward paying off the principal loan amount, not interest.
Third, debt consolidation with Symple Lending enables you to manage your finances better. When you only have one bill to pay. Many lenders report fewer late or missed payments because borrowers must manage multiple bills.
The Effect of Consolidation on Credit Score
Some people hesitate to apply for a debt consolidation loan as it may negatively impact their credit score. The experts at Symple Lending disagree. The credit search performed during the initial application can reduce your score by a few points, but that does not last long. Missing or making late payments is more damaging to your credit history.
However, if you are purchasing a home, you may want to delay consolidation. Applying for a new loan during the closing process can affect your home loan. Talk with your loan advisor before turning to debt consolidation.
Communicating with Experts
Look for a lender that specializes in debt consolidation loans. These professionals can help you find the best loan for your needs. They can also help you decide if a debt consolidation is the right option for your financial situation.
Debt consolidation loans help you gain control of your financial spending. They are designed to help you pay off several loans simultaneously, and you can save for your future goals.
