Dangers of Debt Consolidation Loans
If you’re having difficulty meeting your minimum monthly payments on student loans, credit cards, medical bills or other loans, you can apply to financial institutions for a debt consolidation loan to lower monthly payments and interest rate. The bank pays off all your debt and then you have one monthly payment to the bank for the loan consolidation but this will cause even more debt and the potential of high interest rates. Before applying for a debt consolidation loan, consider contacting a credit counselor to discuss better options for debt consolidation.
The Expense and Risk of Debt Consolidation Loans
Whether you apply to a bank or credit union for debt consolidation loans, the financial institution will lower your monthly payments by extending the length of the loan. Although your monthly payments are lower, you will be paying more in interest because of the longer pay-off term.
If you own your own home, you can consolidate your outstanding debt using the equity in your home. This can be risky if you find you cannot keep up with the repayment terms. When deciding on a debt consolidation loan, keep in mind that using the equity in your home could result in the bank taking your home if you can’t meet the payment schedule.
Credit Counseling for Debt Consolidation
Credit counseling is the best option to get your debt under control without risking your home or trying to pay off a debt consolidation loan for the next 20 or 30 years. Christian Credit Counselors can negotiate with all your creditors to lower your interest rates and stop late fees. Once Christian Credit Counselors works on your behalf you will make 1 monthly payment and Christian Credit Counselors will pay each of your creditors, giving you peace of mind. That’s it, it’s as simple as that! Credit counseling is completely confidential so you don’t have to worry about anyone contacting your place of employment, relatives or friends.
<p class=”p1″>Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.</p>