Loans for Debt Consolidation

Getting yourself into a heap of debts is easy. Getting out of it will take every inch of your willpower and financial strategy to succeed. Loans for debt consolidation are one of those strategies people should consider when the weights of their high-interest debts are too much to bear. This kind of loan works around a simple principle. You acquire a new loan to pay off other loans.

Debt consolidation loans usually offer lower interest rates than those charged by your various creditors. The money you will get from the loan will be used to erase existing debts so you’re left with a single monthly payment. With a lower interest rate debt, this would translate to a lower monthly payment.

A home equity loan can be used as a way to secure loans for debt consolidation. Your consolidation loan becomes secured by the equity of your home so you will be awarded with a lower interest rates compared to those who don’t have collateral to put up against their loans. The equity will determine the amount of money you can borrow from them. Generally, you will get 80 percent of the total amount of your home equity. You might be enticed to get a home equity loan because the interest attached to this kind of loan is tax-deductible. That means you will reduce the entire cost of your consolidation loan to pay back. But you have to keep in mind that you will be putting your home in jeopardy unless you pay your loan back on time.

A personal loan is also an option to get loans for debt consolidation. Lenders are willing to let borrowers take out a personal loan to combine their debts. Unfortunately, this kind of loan comes with a higher interest rate, and it would be extremely difficult to manage your finances if your income is only enough to pay for the monthly payment. If you already have a bad credit history, it’s not going to help you get a lower interest rate. Because this is considered as unsecured loan, you will have to confront an interest rate that is higher than that of a home equity loan. To secure a much more agreeable term, you can ask a family member to co-sign in the contract with you to assure repayment.

Before engaging in loans for debt consolidation, it is important borrowers know what they’re signing up for. People resort to debt consolidation loan to reduce the amount of their repayment and the loan must serve its purpose in the end. You must be able to get a lower interest rate than what you’re currently paying with your individual debts. Just because you’re paying a lower monthly payment, doesn’t mean you’re able to save repayment money. Sometimes, the term of the loan is not due until the next few years so it is like paying the same interest rate only for a longer period of time. Be sure that you have calculated this carefully and that you only agree to it because you feel it’s easier to pay and not because you’re unaware of it.

Loans for debt consolidation can only save you from dizzying amounts of debts if you seize producing newer debts. If you keep on borrowing money, even before you have paid off the older ones, you will keep circling the same financial track. Consolidating your loans can help you get your financial health back in top form if you know how to manage your money and apply the lessons you have learned from it.


  1. Hello Donna,

    I’m not in the position to tell you how much the payments will be or how often. This going to differ for each person since everyone’s situation is unique. If you want to consolidate your debt I would suggest applying here and seeing if one of the lenders can help you.

    Best Regards,

  2. I am in need of a consolidation loan of $3,000.00 to pay off all of my debt. The only questions I have concern the amount of the payments and when they are due, as well as how long.

    I am a disabled widow and I get $1,154.00 each month, on the 3rd. I pay my debts on time and in full; however, it requires paying more interest than necessary, as well as a waste pf gas and time riding all over town to make those payments. If I could cut down on this extra expense and time, it would truly make a difference in my life.

    In addition, my grandson is planning to join the Nation Guard and purchasing a new home, and he wants me to move in with him. I would like to be in a better financial position to share the costs.

    Currently, I live with my daughter. However, one of my largest debts is due to her getting involved in an online scam when her name was on my checking account. She is unable to work and her husband doesn’t feel it is his responsibility to help with this debt. I have managed to get it over half paid off. I just need a little help to get it done and off my back.

    If there is anything you can do to help me, it would be greatly appreciated and I can assure you that my payments will be made on time and in full, provided they are reasonable.

    Donna G. Carter

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