In our modern society, which is ridden with debt, many Americans are struggling financially with medical debt and credit card debt. Although some may find help through bankruptcy protection, not everyone wants to go that route and some have decided to use personal loans for debt consolidation. Many borrowers consider debt consolidation as an option for consolidating high interest credit card debt and other debt. Some people choose to do this through a personal loan, rather than an home equity loan, as they’d prefer not to tie up the equity in their home or they may not own any real estate. If you’re thinking about applying for a personal loan, you will want to compare personal loan rates, terms, etc. first, before you apply for a personal loan and/or debt consolidation loan.
There are many options for those who are in debt and do not want to declare bankruptcy or aren’t that far in debt where they’d even need to consider that. Many borrowers will consider a debt-consolidation loan or a personal loan to consolidate their credit card debt and then close all of those credit cards out after consolidating through a personal loan or debt consolidation loan. Debt consolidation takes a brand new unsecured loan (typically) and uses those funds to pay off all of your outstanding credit card debts and/or other debts.
An unsecured personal loan or debt-consolidation loan can help borrowers consolidate other unsecured debts and put all of your debts into one monthly payment that is typically, but not always, at a fixed interest rate and fixed monthly payment over a set repayment time periods, for example, three years, five years, or seven years (*rates, terms, fixed or variable interest, repayment period, secured or unsecured will vary from lender to lender). This new monthly payment could possibly save you hundreds of dollars a month or more, depending on your current credit card balances, terms, and interest rates, AND the amount, term, and interest rate of the debt-consolidation loan or personal loan that you MAY get approved for, * depending on the lender’s criteria and your credit, income, employment, and other factors *.
In most cases with personal loan lenders, You do NOT need to own a home to qualify for a debt consolidation loan or personal loan, but you will need to meet the personal loan lenders requirements and/or debt consolidation loan lenders requirements. Note: Often the term personal loan and debt consolidation loan or debt-consolidation loans are used as if they are interchangeable, however, they may be separate in some instances. For example, some people use personal loans for reasons other than debt consolidation, such as financing large purchases or paying for vacations, medical bills, weddings or other expenses. Some lenders may classify a debt-consolidation loan or debt consolidation loan as a loan and not use the term “personal loan”, but often times the terms may be used as if they are interchangable, but that will depend on each lender. Always check with the lender as to which type of loan you are applying for and the loan rates, terms, etc.
Typically, debt consolidation loans may be able to be repaid over a longer term (typically 6 months to 5 years, depending on the personal loan and lender) and typically, personal loans may have slightly lower interest rates than some credit cards, but not always. This could mean that the monthly payments could be lower, but not always. You will want to use a personal loan comparison service and/or debt consolidation loan comparison service to compare personal loans and compare debt consolidations loans BEFORE applying for a personal loan or applying for a debt consolidation loan. You can compare personal loans using the personal loan comparison page offered at Lendzz.com.