Sunday, August 3, 2008

Debt Consolidation Loans: No More Multiple Loans Worries

As many loans are offered to everyone today, it is very easy for a borrower to take wrong decisions and become a prey. Borrowing several loans takes one into a severe debt situation and it is a common mistake done by many debtors. You have to take some serious efforts to overcome these debts and the best option is debt consolidation loans. A debt consolidation loan works in a highly practical setup for the borrower’s convenience. You can borrow debt consolidation loans for paying off previous debts to multiple lenders and convert your debt into a single debt and paying a single installment.

A debt consolidation loan provides many advantages that are helpful to you. When compared with your earlier debts, with high rate of interest the debt consolidation loan will be offered at a very less interest rate. By this way you can save a lot of money that you would have been spent as interest for multiple lenders. As a borrower you will be making a single installment payment instead of multiple payments for different lenders. Debt consolidation loan reduces your monthly money outflow and makes it comfortable for you to repay.

Debt consolidation loans are offered to the debtors in two ways. If you don't wish to pledge collateral as well as want to obtain a debt consolidation loan, then the best way for you is to opt for unsecured debt consolidation loan. If you are ready to pledge collateral so that you can get low interest rates for the debt consolidation loan, then you can choose secured debt consolidation loan.

With credit card dues and many outstanding loans, only debt consolidation loan will save you from going bankrupt. Bad credit score along with bankruptcy will make your life difficult and you cannot obtain any fresh loan. Hence it's recommended for everybody to avoid bankruptcy. A debt consolidation loan is generally referred to as a safe loan when compared with your existing unsecured personal loans and credit card dues. Therefore you will have advantage by replacing your other loans of high rates of interest with a debt consolidation loan with lower interest rates.

The debt consolidation loan provides you a lot of advantages like:
A single loan facilitates single monthly installment payment and you don't have to deal with multiple lenders. Debt consolidation loans can be easily managed. The interest rate of debt consolidation loan is comparatively less and the loan is also secured. As the interest rates are low in this loan your monthly installments will be also small. Debt consolidation loan gets you tax benefits for the interest you pay on the loan.

Though you have many advantages by obtaining debt consolidation loan there are also few disadvantages. They are:
Your loan period will be longer than your existing unsecured loans and hence you may have to pay large amount as loan interest. If you pledge collateral for debt consolidation loan, if any default occurs in payment the lender may take possession of your property.

Selecting right debt consolidation loan can solve all your debt woes. For all your current financial problems you can find easy solutions with debt consolidation loan and if the borrower follows proper thought with action in the future, he will avoid becoming a debtor again.

Visit for a completed understanding of several debt consolidation methods. Also, check out to find out how to manage credit card debts in a better way.


debt consolidation said...

debt consolidation involves tackling one major issue at a time. If you attempt to service all of your debt simultaneously with a limited amount of funds, you could stretch yourself too thin, leaving you without enough money to buy month-to-month essentials.

Sam said...

So what is the best solution to settle all debts in the best ways?

Someone have 3 different credit cards outstanding bills of total $15000 and also a personal loan of $10000. The interest rate for the credit cards is 24% per annum and the personal loan is 5% per annum.

So he consolidation all the debts to be a total of $20000 if he is able to clear it at one shot, at no interest charged.

debt consolidation said...

When getting professional guidance, obtain a free debt consolidation quote from a trusted credit counselor. With this, you could lower your payments or settle for a reduced amount.

Anonymous said...

I so wish I wouldn't have gone to grad school. I went to a decent law school, graduated with honors, and even did law review. No job. I'm lucky I only ended up with like $80,000 worth of debt. Many have more.

I don't have much faith in the whole system of debt consolidation, debt counseling, etc. You know why? I was a bankruptcy attorney for a while. I've seen up close that student loan problems can break people's spirits. Not only from personal experience, but also from doing a medical doctor's bankruptcy last year (he had about $150,000).

The consumer has been getting the short end of the stick for quite a while in relation to the financial services industry.