Emergency expenses and extensive credit card use can land you in a sticky financial situation where you’re left paying high-interest rates on all forms of debt. In this case, debt consolidation can be a viable option to help chip away at the debt and possibly pay it off sooner. Here are just a few benefits of the debt consolidation process.
1. Pay Off High Interest Credit Card Balances
Most credit cards utilize revolving debt. This means you can use as much or as little of the max amount set by the credit card company. While it’s good to have that flexibility when you need access to credit, many find it hard not to overspend and fall into massive credit card debt.
If you’ve found yourself in this situation, a debt consolidation loan could help you take control of your debt. This type of loan is considered an installment loan. This means there’s a definite start and endpoint. By moving your credit card debt to a personal loan, you’ll be able to pay it off quickly and save in lifetime interest.
2. Enjoy a Lower Interest Rate
Depending on the terms set by your credit card company, your minimum monthly payment may be going to pay off the monthly interest, not reducing your overall balance. With a debt consolidation loan, you’ll receive a low, fixed-rate compared to the variable rate that most credit cards offer. This allows more of your monthly payments to go toward paying off your actual debt rather than just paying off monthly interest charges.
3. Pay Debt Off Sooner
Instead of making minimum payments on your credit cards which stretches your payment term out for years upon years, a debt consolidation loan provides a realistic payment plan to get you out of debt sooner with a lower interest rate, saving you money long-term.
4. Reduce Monthly Bills
If you have multiple credit cards, remembering to make monthly payments on all of them can be a stressful task. Consolidation allows you the convenience of making one payment which is less to keep up with, reducing stress. Check out our Loan Payment Calculator to explore a variety of different options pertaining to your specific financial needs.
IMPORTANT TIP: When consolidating debt with the goal to pay it off within a certain time, it’s important to discontinue the use of credit cards once this decision is made so you don’t continue to rack up more debt outside of the personal loan.
Ready to Take Control of Your Debt With a DuGood Debt Consolidation Loan?
We’re offering rates as low as 5.75% APR* for the life of the loan, with higher credit limits than ever before! Let us help you start saving now.
If you’re ready to start the process, you can apply in just 10 minutes or less on our website or visit a branch near you! Our lending experts are ready to answer any other questions you may have and to assist you with your financial needs.
*Annual Percentage Rate. Rates vary, are subject to change, and are based on individual credit worthiness. Rate quoted is based on A+ credit rating. Payment example: A debt consolidation loan of $10,000 for 60 months at 5.75% APR will have a monthly payment of $192.17. Not all applicants will qualify. Offer valid for a limited time. Restrictions apply. Contact credit union for complete details.