Such loans also tend to offer a longer repayment period.So if you want to look at the pluses and minuses of debt consolidation for your personal situation, you might want to start by considering your monthly cash flow — and ask yourself the following questions: Pro #1 — When you opt for debt consolidation, you have only one creditor to pay, and that company will call your creditors and negotiate on your behalf.For the past decade, banks have typically charged interest rates on debt consolidation loans of around 7% - 12%.Finance companies tend to charge anywhere from 14% for secured loans to over 30% for unsecured loans.Balance transfer credit cards can reduce the interest you pay on your total credit card debt, effectively lowering your monthly payments and saving you money on finance charges.These cards allow you to consolidate all of your credit debt onto 1 low-rate card.
And when it comes to debt, things become really murky. I’ll answer the questions I hear all the time from 4 Pillars clients including: Debt consolidation involves taking out one big loan to pay off many small loans.
We also discuss the types of debt consolidation companies and organizations that offer these various options.
If this is too much information for you, just skip to the end where we tell you who you can sit down with to discuss these options and get some free advice.
How to Get Good Debt Consolidation Advice for Free A debt consolidation loan is where a bank, credit union or finance company provides you with the money to pay off your outstanding debts and "consolidate" them (bring them all together) into one big loan.
This usually provides you with three advantages: Banks and credit unions usually offer the best interest rates for debt consolidation loans.