More and more Americans are finding themselves juggling several high interest debts.
With such high interest it can seem impossible to actually pay off the original debt itself, leaving so many Americans feeling stressed out and hopeless.
Luckily there is help available to everyone who is suffering from excessive debt, this help is called debt consolidation.
Turn All of Those Bills into One Easy Monthly Payment A debt consolidation loan works by combining all of your current high interest debts into one lower interest loan.
There are two main benefits to a debt consolidation loan.
The first major benefit is the simplicity of having only one payment each month.
One bill each month means less time going to the bank, writing checks, and worrying if you've forgotten to pay a bill.
The second major benefit of a debt consolidation loan is the money you can save!By reducing the interest on your debts, you could save hundreds of dollars every month, which then be applied to eliminating your debt all together.
Unsecured Loans and Secured Loans There are two major types of debt consolidation loans, secured and unsecured.
A secured loan requires some sort of collateral to secure the loan for the bank.
This collateral is usually an asset such as a home, giving the bank the security of something to take to reimburse the loan, should you be unable to repay it.
An unsecured debt consolidation loan does not require any such assets for collateral.
The bank usually balances this increased risk with high interest rates on unsecured loans, compared to a secured loan.
It is also more difficult for someone with bad credit to obtain an unsecured loan, though it is usually possible.
Shop Around - Compare Several Lenders With so many banks and lenders claiming to have the best rates and terms for their loans, it is important that you shop around and obtain quotes from several lenders before settling on any one particular lender.
Online quotes are usually free, so there is really no reason not to compare as many lenders as you can.
The more research you carry out, the more confident you will be when you sign away your debts with a debt consolidation loan.