It’s easy to overspend during the holidays. Gifts, decorations, trips to see family—it’s all so tempting, and you’ll be stuck flying as the season winds down.And there is no way to pay it.
This is more common than you might think. According to a US News & World Report About 42% of Americans expect to go into debt because of Thanksgiving, Christmas, Hanukkah and other holiday expenses, the survey found.
Are you one of them? If so, debt consolidation may be an option. Start getting a free online savings estimate now.
Here’s what you need to know about debt consolidation loans and how they can help.
What is a debt consolidation loan?
AA type of personal loan that you can use to pay off other debts — credit cards, student loans, car loans and more.
You apply for a debt consolidation loan, and then use the proceeds from that loan to pay off your other debts. This is basicallyand a single monthly payment.
Why it can be better than other forms of credit
Usually carry lower interest rates than credit cards, so if you have a high card balance, this can be a great way to lower your interest costs and save cash.
These loans also have a fixed term – an end date by which your loan will be fully repaid. This is very different from credit cards and other revolving loans, which don’t have set repayment deadlines and, if you’re not careful, can keep you in a debt cycle for years.
Does this sound like something you would benefit from? You can get a free, no-obligation debt consultation online now.
Other Debt Consolidation Loan Benefits
Another big advantage of this method is that it makes paying off your loan easier. Instead of putting up with three, four or five different payments each month (which fluctuate), you can make just one set-in-stone payment for the entire loan term. This can make both remembering and budgeting easier.
Debt consolidation may also be possibleBecause it makes it easier to stay on top of payments (and a history of on-time payments is 35% of your score). It can help your score even more if you keep your old accounts open after paying them off. That’s because it lowers your credit utilization ratio — or how much credit line you’re actually using. Credit usage accounts for 30% of your total .
Not sure what your credit score is? You can get your free credit report and FICO score here now.
How to get a debt consolidation loan
Many banks, credit unions and online lenders offer debt consolidation loans, so be sure to shop around. Get quotes from different lenders, and compare rates, fees and terms before deciding which one to go with.
Once you’ve chosen a lender, you’ll need to apply for your loan. You may need to submit tax returns, bank statements and other financial documents, as well as a copy of your driver’s license or ID.
After you’re approved, you can use your loan proceeds to pay off your outstanding debt. Then, set up autopayments to make sure you never miss a payment
A top company like National Debt Relief can help you get started today.
Another way to get out of debt is a. These are credit cards that you can combine into a single balance and transfer other card balances They usually come with 0% interest rates for a short period of time (usually a year or two), allowing you to pay off your loan interest-free.
Just be aware that the rate usually goes up quite a bit after the promo period, so if you can’t pay off your balance before that intro rate ends, this might not be the best option.