November 25, 2008
Having to make payments on many accounts each month puts a lot of financial strain on household finances. You may be able to easily make the minimum payment each month, but this adds to your stress by having to make sure you have the payments in the bank or made on the account by the due date. Making only the minimum payments does very little to helping you get out of debt.
If you look at the amount of interest charged on the accounts each month and subtract this from the amount of the minimum payment, you will see that very little of the amount you pay actually goes towards paying off the balance that you owe. In addition, you have to deal with many creditors and having a lot of bills also reflects on your credit rating in a negative way.
When you have difficulty meeting your payments each month, this has a detrimental effect on your health and your relationships. Stress, especially stress due to finances, is often the cause of many illnesses and it lowers your immune system.
When you are constantly worried about where the money is going to come from to meet your payment obligations, this consumes your thoughts and you find it hard to relax and be happy. It also places a strain on a relationship when one of the partners really wants to make a purchase or take a holiday and you have to be the one to say “No, we can’t afford it.” The more money you have to mete out in many payments each month affects the amount of money you have left over for your living expenses and leisure activities. You may have to forego buying much needed clothing in order to have the money available for a bill when the statement comes in the mail.
With a debt consolidation loan, you can reduce some of the pressure your financial situation is placing on you. Even though you will still have the same amount of debt, you will see more money for yourself each month. This is a loan in which you pay off all your creditors and have only one loan to contend with and therefore one monthly payment. The amount of payment is a lot less than the sum of all the payments to each of the creditors. This gives you freedom in having only one due date and payment to have to make each month.
Lenders look favourably on borrowers that apply for loan consolidation. Your current credit rating will have an effect on the type of loan for which you qualify. You may be able to take out an unsecured loan in which you do not have to use any of your property as collateral or you may have to take out a secured loan in which you do have to use your home or some other property as surety for the loan. The amount you need to borrow will also have an impact on the type of consolidation loan you take out. If you have an excellent credit rating, the lender will be able to offer you the lowest interest rate.
There is a wide range of lenders who will approve both secured and unsecured loans when you want to consolidate your debts. The interest rates now are lower than they have been for years making this the perfect time to lessen your financial strain. Shop around online to find a lender with the most competitive rates and repayment terms to meet your needs. You are able to use the loan calculator available on the site to experiment with various terms to find out how you can become debt-free sooner than you expected.