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Published On: Sun, Aug 9th, 2015

What are the major benefits of a debt consolidation loan?

When it comes to managing your outstanding debts, debt consolidation loans come very handy. Such loans provide the borrowers with a number of advantages in case they have a number of unpaid debts.

Being knee-deep in debts, if you’re eligible for a debt consolidation loan, you must go for it and take advantage of what it has to offer.

Here are some major benefits you can get by taking out a debt consolidation loan.

  • Single payment – Debt consolidation lets you take out a single loan to pay off other debts. If you own a number of credit cards and credit accounts with balances on them, you can use a debt consolidation loan to consolidate other debts into a single source and stop worrying about multiple payments every month. Just make a single payment each month towards your debts. It will make you emphasize on a single debt and get it paid off faster. It will also help you stop wondering which debt to pay off first and put your cash into this single account. Your monthly payment might however be smaller, as you will get a longer time-span to pay off the loan.
  • Stress elimination – By means of debt consolidation, you can consolidate all your debts into a single account and thus, you can significantly reduce your level of stress. As we know, in today’s life, debt is one of the common sources of stress creation. By being worried about debts, you will be unable to concentrate on other areas of your life. By consolidating your debts, you can focus on other important factors in your life and stop worrying about debt issues.
  • Lower rate of interest – Another great advantage of a debt consolidation loan is that it lets you save a lot on interests. Most people deep down in debt have a number of credit cards which are maxed out. Credit cards usually charge higher interest rates when compared to most other types of debts. Through debt consolidation, you can get a cheaper interest rate and thus save money on monthly payments and over the lifespan of the loan as well.
  • No more collection calls – One added advantage of a debt consolidation loan is that you won’t have to worry about irritating collection calls any more. If you owe a number of debts, you’re likely to lag behind on your payments. Under such a circumstance, creditors typically turn their account over to the collection agencies. A debt consolidation loan would help you pay off all these debt balances and effectively put a stop to collection calls.
  • Improved credit score – With the help of a debt consolidation loan, you can significantly improve your credit score. If you constantly make late payments on your credit accounts, it will surely hurt your credit score. By consolidating your debts into one debt and staying on top of the payment, you can rebuild your damaged credit once again.
photo/ Michael Jarmoluk via pixabay

photo/ Michael Jarmoluk via pixabay

Guest Author: Mariia Lvovych

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  1. Debt Consolidation Loan Com | collect - best debt collection agencies says:

    […] What are the major benefits of a debt consolidation loan? – When it comes to managing your outstanding debts, debt consolidation loans come very handy. Such loans provide the borrowers with a number of advantages in case they have a number of unpaid debts. Being knee-deep in debts, if you’re eligible for a … […]

  2. What are the major benefits of a debt consolidation loan? | My Blog says:

    […] What are the major benefits of a debt consolidation loan? Single payment – Debt consolidation lets you take out a single loan to pay off other debts. If you own a number of credit cards and credit accounts with balances on them, you can use a debt consolidation loan to consolidate other debts into a single … Read more on The Global Dispatch […]

  3. Handling Credit Card Debt During and After Divorce | BZCOW says:

    […] What are the major benefits of a debt consolidation loan? Single payment – Debt consolidation lets you take out a single loan to pay off other debts. If you own a number of credit cards and credit accounts with balances on them, you can use a debt consolidation loan to consolidate other debts into a single … Read more on The Global Dispatch […]

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