If you have a lot of debt, and you’re trying to get rid of it, finding ways to pay it off faster can really help. Not only does that clear the debt and give you more financial freedom, but it can also mean that you pay less interest, too.
Whether you’re paying extra every month or just looking for options, debt consolidation could be a great way to pay your debt down faster and have more money left at the end of the month. Here’s what you need to know about how it works.
What Does Debt Consolidation Do?
Table of Contents
Debt consolidation is exactly what it sounds like. It takes your payments and loans from all the lenders you want to include in the consolidation and puts them into one loan.
Then, the proceeds of that new loan pay off the old loans, and you have only one monthly payment to the new lender. It sounds like a great idea, and it often is, but you want to make sure you’re working with a trusted company and getting a good deal before you sign up for consolidation.
A lot of people like debt consolidation because they can generally save money with it. It’s not the perfect solution for everyone, of course, but it’s a good way for a lot of people to make their way out of debt that they might not be able to easily clear otherwise.
By having just one payment, it’s also easier to budget for that expense, which can help you start to save, address other expenses, or just have some breathing room in your finances.
Are the Interest Rates Always Lower?
Companies like Symple Lending offer rates that vary depending on a number of factors, and that means the rates you’ll be offered if you qualify for a consolidation loan aren’t always going to be lower than the rates you’re already paying on your debt.
However, in many circumstances, you can expect to be offered a rate that’s lower, especially if you have a lot of high-interest debt you’re trying to get rid of. You don’t have to settle for those kinds of interest rates when you consolidate.
How Long Will the Repayment Term Be?
Repayment terms on consolidation loans depend on the amount you borrow and the rate of interest being charged. Depending on those two specific things, along with any fees or other charges that are added into the loan, you could have a payment for a few months or several years.
Making sure you see the payment terms and understand them before signing your consolidation loan paperwork is very important, so you know when you can expect to be free from your debt.
What Should You Look for in a Consolidation Company?
Corporations in the same category as Symple Lending can have different terms and requirements, so look for a company that meets your needs. You should get an interest rate and repayment terms you feel good about, along with answers to your questions, before choosing a company to work with.