What is Debt Consolidation?
March 28, 2019
Do you feel that your debts do not go down and that you are not leaving them?
Or maybe you have past due debts and the surcharges and collection calls do not let you sleep peacefully? Debts can overwhelm us if we let them grow, so debt consolidation can be an answer to end all pending and leave one with better conditions.
What is a debt consolidation?
Debt consolidation is an easy way to pay off everything you need by getting a large loan to cover all the small debts, such as credit cards from different banks, and thus pay a lower interest rate in a single monthly payment, which represents an advance in your personal finances.
Jorge has three credit cards and a personal loan for which he pays a global interest of 40% and four different court dates. If you asked for a loan to pay everything you would reduce your interest rate by 50 percent due to the size of the large loan and you would have a single cut date with an already established payment. This would minimize the risk of forgetting some payment, which would represent higher charges and have a fixed date to know when it will end your debts.
By consolidating your debt you will have a lower interest rate and a substantial saving in debt.
This step requires much greater responsibility and commitment since it is a large loan. If you do everything as you should, your record will be strengthened because you will show greater ability to pay for future credits.
And what can I pay with consolidation?
They are usually minor credits but when summed they represent a considerable amount such as personal loans, academic credits, medical emergencies and credit cards.
If you have many debts, say more than three with different interest rates and terms, consolidation is the option you were looking for to reduce monthly payments, better manage and strengthen your track record.
Compare the options available in the market and make sure you can cover the new monthly payment in a comfortable way. It is always preferable to set a lower monthly payment and contribute more if possible.
Maybe the deadline to finish covering all your credits is lengthened, but still you will end up saving in interest and especially in many headaches.
With Bi-Gazer loans from Banco Industrial, you have the best options to finance your projects: from consolidating debts, studying a master’s degree, starting your own business or making the trip of your dreams, Bi-Hard makes your goals possible today.