There are a few common attractions why you should consider the idea of consolidating your debts:
Lower Interest Rates – Some unsecured debts especially credit card debt can carry high interest rates in the double digits. Many debt consolidation loans especially secured personal loans, such as those taken out against your home’s value carry lower interest rates.
Different Type of Interest Rate – If your current debts are at variable rates that may go up, you will not only get a lower interest rate by consolidating debts but also get a fixed interest rate. The benefit is that you will always know what rate you going to pay, without fear that it will drastically increase in the future.
Lower Monthly Payments – You can pay less per month.
More Time to Pay – Generally when you get a debt consolidation personal loan, the loan repayment is stretched over a greater amount of time such as fifteen to thirty years if the loan is in the form of a mortgage.
One Easy Payment – Rather than writing many cheques each month to different creditors, with a debt consolidation loan you only have to write one cheque for one payment.
Less Hassle – Because you only have to write one cheque to make one payment, you only have to deal with one lender as well. This is convenient if you want to try to negotiate with the creditor later, such as during a time of financial hardship rather than having to call several lenders.
Stop Collections and Foreclosures – By consolidating your debts, your previous lenders are paid off and you owe money to a new lender. Because those past creditors are paid, they no longer have any need to further pursue collection actions such as law suits or foreclosures against your property. This can be a great stress reliever if you were previously concerned about having property sold or wages garnished.
While debt consolidation personal loans are not for everyone such as those already enjoying low interest rates, they can be a boon for you if you are struggling with paying your debt. You just need to evaluate your own current debts and determine whether the benefits of debt consolidation personal loan would apply to you and take back control of your finances by consolidating credit card, personal loan, student loan, car loan and even your home loan debts.
To know more about how to handle your personal loans visit Credit World Australia at http://www.creditworld.com.au/
About CreditWorld Australia
CreditWorld is Australia's leading online financial comparison web site where consumers can find the best current deals on personal loans, credit cards, bank accounts, home loans and more. It is a 100% Australian owned and operated company offering independent information on a wide range of financial products all with secure online applications.
By: Cesar Marlo Rivera