Strategy Is The Key To Getting The Desired Results From Debt Consolidation Loans

If you try to explain to a classroom full of middle school students what debt consolidation loans are, they will probably tell you that taking out a debt consolidation loan is a terrible idea.  Why would you borrow more money if you are already in debt?  If you are a working adult, however, balancing a monthly budget while the price of everything keeps rising, it is obvious that you can save a lot of money in the short term and the long term by taking out a low interest loan, using it to pay off your credit card debt, and then making much lower monthly payments than you currently make on your credit card.  Debt consolidation is not a way to get rich quick by any stretch of the imagination, but the better your strategy at borrowing money to consolidate your debts and then repaying it, the more beneficial it will be to your financial situation.  For help building the best possible debt consolidation strategy for your circumstances, contact a Jupiter debt consolidation lawyer.

Choosing the Best Loan Amount and the Best Repayment Timetable

Debt consolidation loans tend to be unsecured personal loans with interest rates which, though they vary depending on the lender, your credit score, and when you originate the loan, are much lower than the interest rates of credit cards.  As with any kind of loan, you should only borrow as much as you need.  Therefore, you should borrow only as much as it takes to repay the debts that you want to pay off with the consolidation loan.

Many personal loans come with fees relative to the repayment term for the loan.  For example, if you take out a $2,000 loan, and the repayment agreement says that your monthly payment will be $185 per month for 12 months, the total amount you pay will be just over $2,200.  If you choose a $53 per month option with a five-year repayment term, you will have paid more than $3,000 by the time you are finished paying off the loan.

Getting the lowest possible monthly payment can be good protection against falling behind on payments, especially if you are a gig worker with variable monthly income.  Paying more than the monthly payment each month will save you money on interest over time.  Lenders know that you know this, so that may charge fees for an early payoff.  In general, though, paying off a loan early costs less than missing payments and incurring late fees.  With the help of your calculator, you can find a debt consolidation loan that works for you.  If your debt problems are so comprehensive that debt consolidation loans are just a Band-Aid solution, though, you should consult a debt lawyer.

Work With a Debt Lawyer to Consolidate Your Debts

A South Florida debt lawyer can help you make wise choices about applying for debt consolidation loans and then repaying them on time or ahead of schedule.  Contact Nowack & Olson, PLLC in Jupiter, Florida to discuss your case.

Source:

nerdwallet.com/ca/loans/dos-and-donts-of-personal-loan-repayment