Friday, July 17, 2015
Debt Consolidation: Take Out One Big Loan to Pay Off All Smaller Loans
Although using your credit card to pay for your groceries and taking out a mortgage is financially convenient, doing so can slowly bury you in debt if you don’t manage it properly. If your debts pile up and you become unable to pay, however, there are a number of debt relief options you can use. One of the most appealing of these is debt consolidation. This option involves taking out a huge loan to pay off a number of smaller loans. While it seems pointless considering that you only replaced your existing debt with a larger one, it is actually meant to reduce your monthly payment. Compared to multiple loans with multiple interests, which sometimes vary in rate depending on the terms, a single loan may come with a much lower rate. That’s where you experience debt relief.