subject: Reasons to Consolidate a Loan [print this page] There are many great reasons to consolidate a loan. When you're bills have become unmanageable and overwhelming and you need a way out, but aren't in a situation to claim bankruptcy, debt consolidation is a great way simplify your payments and make everything more manageable and organized. You may even be able to save yourself some money overall. The four reasons below are some of the common desired results of a consolidation.
To have one payment a month is the result that is true for everyone. This can make it easier to keep everything straight and make paying things off more manageable, so it's not a benefit to overlook. The situation being overwhelming is one of the top problems when your finances get out of control, and this helps sort that out.
Taking care of your troublesome debts, before they become worse. If you're having a hard time keeping up with the payments and things are being marked late and you're going to be damaging your credit report, this takes care of that old account.
To get more manageable payments. If your monthly payments are too high, hopefully you can finance for lower monthly payments--although be aware that this will mean it will take longer to pay it all off.
And the best reason, when possible, is to get a better interest rate. This isn't going to happen for everyone, sadly, but if you have a high interest rate debt--like credit cards, or even worse, payday loans--then this can be a particularly great thing for you. Sadly, because you have probably damaged your credit recently trying to take care of all this, you'll be getting offered higher interest rates than you would with a higher credit rating, but in some situations it will still be better than what you are currently paying. Getting a lower interest rate will make paying things off happen a lot faster for you, and lower the amount you owe overall, so this is always a great reason all on it's own.
Reasons to Consolidate a Loan
By: Jennifer Quilter
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