Things You’re Probably Not Aware of about a Debt Consolidation Loan
Multiple troubles then!!!
No worries, though! You have got an option on the service page of our website, on which we are going to have a good discussion now.
More than one debt is a reality, and you can be seriously troubled by them. Managing your earnings and then keeping close to all those debts is something which needs good willpower.
Not just willpower, though, you need to manage multiple debt interest rates, and that is where the challenge strikes you.
Actually, when there are multiple debts, there are variable loan amounts and terms. You can definitely manage those loans in time if your salary is giving you good news. But when that doesn’t happen, you face significant difficulties in paying different amounts in instalments because that does not give you many options to be organised with the payment.
Debts are disastrous, and they can take away the sleep of nights and can make you focus less on the more essential things in your life. In this way, you and not do something productive always until the time your debts are over.
Our question is why you would have to bear this pain when the solution is there with a debt consolidation loan.
Wait, you may not know about it fully, right?
Well, this is why this post has been created.
Understanding Debt Consolidation Loans by Things You Did Not Know about Them
A bad credit debt consolidation loan from a direct lender will make sense when you would concentrate on the very title it has been given.
The debt consolidation loan is usually a personal loan that consolidates all your personal debts into one single debt. You no longer have to bear the interest rates and instalments of varied nature for other debtors. You can use the debt consolidation loan to pay them off at first and stick to one instalment and a fixed interest rate with a single loan term to your direct lender.
So, you see why one loan of this kind solves many of your debt problems. You can now enjoy your instalments as well.
Speaking of instalments, we are now going to explain to you a few facts that you need to know about these loans so that you can make an informed decision about it the next time (or for the first time) you take them out.
- A Debt Consolidation Loan actually Lowers Interest Rates
- It Is a Better Option than a Balance Transfer
- The Interest Rates Are Even Lower than Credit Card Interests
- It Manages Stress…and This is What Studies Found
- It Works the Best When You Want to Repay Your Debts Faster
- You Can Prevent Cash Flow Issues
Now you can read about them in detail:
1. A Debt Consolidation Loan actually Lowers Interest Rates
Think about it clearly.
When you are taking out a debt consolidation loan, then you are getting the advantage of choosing your loan term and interest rates.
This is not possible when you are paying multiple debtors as they have their own terms, right?
Taking out a loan like this will repay all your debtors, and you are now over with that connection. You can now sit comfortably with your direct lender and get your interest rate lowered.
But how you can do that?
Well, you can choose variable loan terms, which can lower your interest rates. The longer the term you choose, the lower the interest is going to get.
Apart from that, we direct lenders do offer you a good many flexible plans to get the interest rate comfortable for you to repay.
2. It Is a Better Option than a Balance Transfer
A Balance transfer is a way when you transfer money from one account to the other. Yes, it can help you pay your debtors all at once but is it really more helpful than a debt consolidation loan?
A debt consolidation loan for bad credit with direct lender facilities is offered to the borrowers’ bank account from which they can send money to their borrowers just to withdraw cash and pay them.
Compared to a balance transfer, a debt consolidation loan is an easier process that gets the job done in a snap.
3. The Interest Rates Are Even Lower than Credit Card Interests
Did you know that debt consolidation loans come with relatively low-interest rates?
Yes. It is because we stated that already in a point stated previously.
But you might often think of owning another credit card to pay your debtors back, right?
Well, you might need to pay 4 times the interest rate with a credit card than a debt consolidation loan. Since these loans come with longer loan terms, they are naturally low n the interest rate section, and that is precisely what you want.
4. It Manages Stress…and This is What Studies Found
What do you get when you are getting a loan of this kind.
Well, you are simply making payments faster and more organised.
Since these loans come with a fixed interest rate, they keep you organised, and you don’t worry about the instalments from a handful of debtors.
Studies have found that the reduction in financial stress also works great for decreasing your psychological stress.
That’s a bonus!!!
5. It Works the Best When You Want to Repay Your Debts Faster
Unlike balance transfer (mentioned before), you can pay all your debtors from your bank account with a single debt consolidation loan.
And this makes the fastest loan repayment, don’t you think?
6. You Can Prevent Cash Flow Issues
Consolidating your debt with a loan like this will aid you greatly with the cash flow options because your income and expense ratio won’t be compromised.
As a matter of fact, you will become more organised and oriented with the instalments since they will come at a fixed rate.
Are you looking for a debt consolidation loan for 5000 pounds in the UK right now?
Well, we can help you with that. Just find out the service page and let us know your requirements. We’ll be happy to help you.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.