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Debt consolidation Personal Loan Basics

What is Debt Consolidation?

Debt consolidation is a debt management method in which one or more debts are rolled into another type of financing. For example, you could get a debt consolidation loan or a balance transfer credit card and use it to pay off old debts at a lower interest rate.


You should ideally consolidate your debt at a lower APR than you are already paying. This can save you money on interest, cut your monthly payments, and allow you to pay off debt faster.

Debt Consolidation Loans Are Available

How does debt consolidation work?

Although there are numerous ways to consolidate debt, the process is typically the same: you pay off one or more debts with a new debt. Personal loans and balance transfer credit cards are two popular debt consolidation methods.


Depending on your specific situation—how much debt you need to consolidate, your credit score, how quickly you need the funds, the sort of debt you have, and other criteria—one approach may be more suitable for you than another.


Personal Loans:

With a debt consolidation loan, you can combine multiple types of debt into one fixed monthly payment.


Balance Transfer Credit Card:

Consolidate credit card debt into a lower-interest balance transfer credit card.


Debt Consolidation Loans Are Available

How to consolidate debt with a personal loan

  • ● Check your credit score. The majority of consolidation solutions will require a credit check. Because unsecured personal loans do not require  collateral, lenders rely primarily on your credit score, as well as other criteria, to verify eligibility.
  • ● Determine how much you need to borrow. Add up all of the monthly debt payments you would like to consolidate. A personal loan can be used to pay off credit cards, payday loans, and other high-interest debts.
  • ● Determine the APR required to save money. For a debt consolidation personal loan to be beneficial, your APR must be lower than what you are already paying on your debts.
  • ●Compare APRs by prequalifying with lenders. Many lenders allow you to prequalify for a personal loan in order to estimate your possible APR without affecting your credit score. This allows you to compare estimated loan offers before submitting a formal application.
  • ●Submit formal application to a lender. If you are approved, the lender can directly transfer the funds into your bank account. That money can be used to pay off any form of debt.

Debt Consolidation Loans Are Available

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