If you are looking to get consolidation loans, consolidate credit cards, or are simply curious about how to consolidate debt into one payment, then you came to the right place. We have a broad variety of creditors that are sure to help you with your financial situation.
But they don’t just stop at credit card consolidation loans, no, they can also help you with student loans, home loans, consolidating debt into one loan, etc. and we can also show you how to consolidate credit cards in general. Our creditors are some of the best lenders for debt consolidation.
By simply giving us your email address, we can send you a list of creditors, some of which are sure to suit your personal needs. However, even when provided with this list, how do you know which creditor to trust and how do you go about getting the right loan for you. That’s what we hope to discover in this article.
So, let’s get started with consolidating bills into one monthly payment!
Is debt consolidation wise, and should you use it?
Having a lot of different loans can be rather tedious, or even harmful to your bank accounts and credit scores. That’s why it might be a promising idea to consolidate your credit cards into a single payment a month. Does consolidated credit hurt your credit? Well, not necessarily. It can help you keep better track of your financing and even save you lots of money if done correctly.
But how do you know which loan to take and which ones to avoid? Which consolidated credit companies have the right loan for you? While we have talked about debt consolidation loans in general on this site, we still felt the need to go into more detail when it comes to the broad subject of credit card consolidation.
We hope to cover these three points in this article, and how they can help you save money. We should be able to answer most of your questions regarding debt consolidation when it comes to credit cards. Don’t forget about our creditors when reading this article about how to consolidate debt into one payment.
- How to consolidate credit cards into one payment?
- Your inherent risk
- Alternative Options
How to consolidate all credit cards?
While you might have heard about regular debt consolidation, credit card consolidation has a few different dangers to be aware of. First and foremost, you must think about this: Can you pay for your all of your debt and simply want to speed things up, or are you having trouble with keeping the payments on time. These two factors will determine your next course of action.
Should you only want to speed up the rate at which you are paying of the loan, regular debt consolidation might come in handy. Know that these options are great if you can pay off your loans and simply want to get out of debt faster or easier. But please keep in mind that if you simply combine the debt into one payment and stop there, then you won’t make the problem go away. You would just be prolonging it.
Home equity loans:
These loans can be very helpful when it comes to debt consolidation and when you want to consolidate credit cards. You can consolidate your credit cards into one payment using this type of loan without getting a high-interest rate. Some rates are as low as 3.74%, which is great considering usual values are fixed somewhere around 13%.
But what does this loan even do, and what about it is especially dangerous? Can you use it to consolidate debt into one payment as well?
Well, yes, typically, home equity loans take to the market value of your house/apartment and use it as collateral for the loan. This turns your unsecured credit card loan into a secured loan. Should you be interested in unsecured and secure loans then please visit our main page on debt consolidation. By turning your loan secure, the creditor can easily lower the interest rate.
Simply be aware of the fact that you could now lose your home in opposed to when your loan was still unsecured.
Credit card balance transfer:
Some creditors want to gain new customers fast and can really offer you great deals on transferring your balance (consolidate your credit cards). You basically combine, it’s as simple as that.
Creditors sometimes offer transfer rates as low as 0% making them ideal for easy and quick debt consolidation. This method is ill-advised if you end up getting a higher interest rate on your loan in general or have to pay a horrendous amount simply for having your credit transferred.
Please note that this option works best if you have an almost flawless credit score and you aren’t in too much debt. Some creditors don’t even end up giving you the option of transferring your credit if you don’t meet their requirements.
There is also the option of getting a personal loan. A personal loan refers to any type of loan that is given out to an individual(company) The most notable forms of personal loans are car loans, home loans, student loans, etc.
This kind of credit card consolidation lets you do everything yourself. You apply for the loan and use said loan to pay off your other creditors. This can backfire on you relatively quickly should you have a poor credit score. This type of loan is usually heavily linked with your credit score and history.
The rates on this low can also be high. You can stretch them out if you are planning to pay them over a longer amount of time, but be mindful of the interest rate. The longer you wait to pay off your loan, the higher your final cost will be.
But what should you do if you are having trouble with your monthly rates in general?
The options above are only commendable when it comes to quickening your payment process. In order to use debt consolidation to help you get out of serious financial trouble, you might need to bring in outside help. The first choice should be a counselor who can help you with useful information on your personal debt, banks that offer debt consolidation loans often provide these for you. Alternatively, you can turn to a debt management company or bill consolidation programs.
A debt consolidation company should be your final resort due to the high chance of your credit score being impacted badly. Also, don’t believe that because you simply gave your debt to a management company that your debt is taken care of. You have to put in the effort as well for your debt consolidation loans banks can’t do all of the work.
The first thing that the company might request for you is to stop paying the creditors and just pay the credit card consolidation company. It does not matter to them if you simply want to consolidate credit cards or even consolidate all of your debt. A debt management company tends to put your money in an escrow account afterward and hold all your payments to the creditor.
This puts your accounts in default and the creditors can’t get their money from the management companies, causing great problems for your credit score which will be visible for the next 7 years. One is tempted to think: Oh, I can consolidate my debt into one monthly payment using these management companies, and they will be able to save me some money.
Well, they can but it might not always be in your best interest for you to consolidate all debt into one monthly payment when using these companies. Don’t forget that you will be paying them all of your money, not your initial creditors.
Why would the debt management companies do something like this in the first place if it only harms your credit?
They are hoping to get a settlement from the creditor. This may take a long time as most creditors tend to collect aggressively for the first 5 months. After that it’s all up to chance, you might get a settlement and all could go smoothly. Or your initial creditor may sell your debt to a collection agency for a fraction of its original worth.
On top of that, you still have to pay the debt management companies to consolidate your debt, causing you to lose even more money in the process. Now, debt consolidation companies can definitely help you if used correctly but beware of the consequences if you can’t pay them back.
It might be a clever idea to simply look at your finances and help yourself out. Look for the reason that brought you into debt in the first place, and try to pay your regular loans back if at all manageable if you don’t want to risk the debt consolidation company harm your already wounded credit score.
Your inherent risk, debt consolidation, and credit score
While we have talked about risk in general, we still need to determine what risks you have when you try to consolidate credit cards in general, for you and your creditor. We will also mention secured and unsecured loans, which are mentioned in the previous article.
Let’s look at the risk for the creditors first and what that means to you. The creditor determines 2 very important things from risk: Should he even give you the loan, and what interest rate should you get? Your credit score and your credit utilization rate are the first things that come to mind. These two factors can already help determine your interest rate greatly.
Are you in a stable work relationship? How long have you worked there etc? Your employment situation is a big deal when you want to consolidate credit cards. Even if you apply for a debt consolidation loan, the lender will most likely be reluctant to grant you said the loan should you be unemployed. Another factor might be how much collateral you can offer the creditor in case you can’t pay the monthly rates.
You get also get a guarantor in case you can’t supply the creditor with the security he desires, just not that this can be a risky road to go down since you involve another person directly in your financial situation. This might put a strain on a personal relationship or even hurt that person’s credit score.
Now that we know what the banks look for, let’s move on to the risk that you have from consolidating your credit cards into one payment.
So now that you know how to consolidate all debt, and after consolidating your credit cards correctly, studies have shown that your credit score will rise dramatically over the course of 4 weeks. This also presents newfound spending freedom for you. Be aware of the fact that you don’t actually have that much more money to spend. The rise in spending power can lead to the total downfall of your finances.
Now if you consolidate credit cards, or want a debt consolidation loan, that loan does not always have to be secured. However, if you choose to go into that particular direction due to the interest rate, beware of the possibility that the creditor can foreclose your house, sell your car, etc.
You also run the risk of paying more than before if you don’t do the proper research. You might have to pay a few for consolidating your accounts or setting up a new loan. This means that you will have some starting cost without even being able to use that money for paying off your loan.
A high-interest rate over an extended period of time should also be avoided at all costs since you will end up paying a lot more money than initially intended. That being said, simply try to spend a little less and cut back on spending as much as possible. You could run the risk of losing your house, credit score, and more if you don’t consolidate your debt credit correctly.
Like we mentioned earlier, if you simply consolidate bills into one payment and don’t change your spending habits, then you won’t be able to achieve a debt-free life.
You also have other options to help you get out of debt if you don’t want to use debt consolidation. Talking with creditors directly might help you get a settlement, or some of your debt might even be dropped completely. Getting a creditor to lower the interest rate is also an effective way to save money.
Filling Bankruptcy would truly be the final solution for you to work with. It describes a legal state in which you are in. If you would like to know more about bankruptcy please visit our main article. It is best to talk with a legal and financial advisor in order to find out if you should even consider the option of Bankruptcy.
You could also take demand loans which are short-term loans. These might not solve the problem but they might give you a little more time in which you could consolidate bills into one payment. Remember that none of these options are permanent solutions, it’s up to you to pay off your debt. With the help of our creditors, this should not pose a problem.
We here at cash care wish you the best of luck when looking for a creditor that suits your demands when you try to consolidate credit cards for your own benefit.