Loan Consolidation - A Way Of Getting Out Of Debt Fast
If getting out of debt is your primary mission in life right now
, you are obviously open to all possibilities of help. Have you considered debt consolidation? If not, you are missing out on the one resource that could be key to moving beyond your debt.
When you accumulate more debt than you can pay back right away, a lot of liquidity problems arise. You experience a variety of problems that make paying the debt back harder and harder. For instance, how do you handle all of those bill statements, demands for money, and over due notices? It can get messy for sure!
For those suffering from major liquidity problems the struggle is making payments on the debt, if they can make payments at all. This creates a tense dilemma which debt consolidation services can help with. Getting out of debt is never easy but it is important so considering these services is a worthwhile idea.
Loan consolidation brings instant relief because it allows someone in debt to get rid of that big stack of bills! They simply combine all of their debt into one single loan, this way there is only one bill coming in monthly. This takes a lot of the stress out of being in debt and allows them to pay off the actual accounts they are in debt with right away.
There is a clear managerial benefit to having only one bill. Basically, it is a lot harder to miss a payment when you only have one obligation to make. However, there is also the previously mentioned example of increased liquidity.
Paying $100 a month minimum on four monthly statements comes out to $400 a month. Paying one debt consolidation bill for $220 would leave you with $180 extra a month.
Of course, no one is saying that you couldn't put the extra $180 towards the principle of the dept consolidation loan. Getting out of debt will be a lot quicker when you pay more than the monthly minimum.
There are two different types of loan consolidation available right now: secure and unsecure. An unsecure loan is the personal loan that most people want since you don not have to put up any collateral. Yet, you are limited to a maximum of $10,000 on this type of loan. If you have more debt than that you will need to go for a secure loan that does require collateral upfront.
A secured loan requires some type of collateral which ensures the lender gets at least some of the money back if the loan goes into default. The most commonly used collateral is a home, but vehicles and other expensive items can also be used.
Loan consolidation is a great resource for those who make getting out of debt their primary goal in life. It brings relief without absolutely excusing any of the debt, which is fair for everyone involved. The original lenders get their money back and the person in debt gets relief from out of control debt causing them so many problems.
by: Lonny Conrad
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