We are not in the business of giving financial advice, but when it comes to a debt consolidation loan, we know a lot more than most. At the end of the day, we understand that debt is difficult for just about everyone and that finding a way to consolidate can be a huge relief. It’s always exciting when we get emails from borrowers who have read our blog and decided to take back their lives with a debt consolidation loan.
The bottom line is this: debt sucks, but there are ways out of it. One of those ways is by getting serious help with your debts through consolidation loan solutions so you can get caught up on your bills and save money in the long term. In this post, we’ll tell you why a debt consolidation loan is a way to go if you want to get rid of your debts.
Why Debt Consolidation Loan? A Brief History of Debt Consolidation Loans
Between 1973 and 1983, the U.S. experienced a consumer debt crisis that saw a huge jump in personal credit card borrowing and a concomitant increase in personal bankruptcies that peaked at more than 1 million in 1983. The Federal Reserve responded to this crisis by creating the Debt Collection Improvement Act of 1996. This act made it easier for financial institutions to secure payment, but it also increased the level of regulation on debt collectors.
Since then, there have been a number of changes in legislation that have affected how credit card debts are collected, but there has also been a significant change in the private sphere through the rise of opportunities for consumers to consolidate their debts.
The modern debt consolidation loans industry has grown tremendously in recent years, with lenders like Lending Tree offering borrowers access to experts who help them make informed choices about how best to consolidate their student loans and other types of debt.
Why Choose a Debt Consolidation Loan?
While there’s no such thing as a debt-free society, debt consolidation is one way that you can lower the amount of debt that you owe and get yourself back on track. Depending on your debt situation, you can get help to pay off debts based primarily on the size of your debt and the interest rate, along with a number of other factors. The amount of time it takes to pay off a loan depends primarily on how much money you have available in monthly income to pay down debts each month after subtracting your monthly expenses from your monthly income.
How Does Debt Consolidation Loan Work?
Here’s how consolidation works. When you apply for a consolidation loan, you’ll first meet with a representative who will help determine the size of your monthly payments and your interest rates. They will then help you understand how long it might take to pay off your debts based on the amount of money that you can afford to put towards paying them down each month. From there, you can choose which debts you want to consolidate, as well as any specific terms that make sense for your situation. In some cases, lenders may offer agreements whereby some or all of the interest is forgiven if certain milestones are met prior to the end date of those terms.
How Do I Choose the Best Lender for My Debt Consolidation Loan?
With so many lenders available, it can be overwhelming to make even the first step towards searching for a debt consolidation loan. Here are some things to keep in mind when choosing a lender:
Look at upfront costs. High fees can render debt consolidation loans impossible to pay off in the long term, so it’s important to check out interest rates and fees before signing on. In addition, you want to remember that you have a right to receive a copy of the agreement that the lender is going to require you to sign prior to making your deposit or paying your down payment on a loan. High fees can render debt consolidation loans impossible to pay off in the long term, so it’s important to check out interest rates and fees before signing on.
In addition, you want to remember that you have a right to receive a copy of the agreement that the lender is going to require you to sign prior to making your deposit or paying your down payment on a loan. Ask yourself some questions. Don’t be afraid to ask any lender you are considering some questions about their process for consolidation loans.
At Canadian Cash Solutions, we know our industry well. We offer our own debt consolidation loan service, but we also work with over 200 other lenders who specialize in lending for emergency expenses like medical bills, jobs losses, and more. We can help you to figure out which lenders are the best fit for you based on your needs. Don’t be afraid to ask any lender you are considering some questions about their process for consolidation loans.
Compare rates and terms quickly and easily. Since so many lenders offer different credit solutions, it helps to enlist a little outside help when looking at them all together and comparing rates and terms. Canadian Cash Solutions can help you to compare rates on all of them in a way that is completely free of charge. Since so many lenders offer different credit solutions, it helps to enlist a little outside help when looking at them all together and comparing rates and terms.
Conclusion
There are many benefits that come with consolidating your debts, including the opportunity to more easily pay off debts of all kinds. It’s also important to note that if you are able to pay off your loans before they are due or you refinance, this is a more effective method of paying off debts than consolidation. That said, for those who need some extra help with their debt problems, consolidation loans can be a great solution.
