Debt Consolidation Loans

Written by Abby Luttrell
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In our fast-moving society it's easy to get into debt. Credit card companies fill our mailboxes almost daily with offers for credit cards. Stores will extend credit when you've made your first purchase.

And sometimes we don't read the fine print which specifies the interest rate on the money that we're borrowing. Interest rates on credit cards can be as high as 22%, and from lending institutions, as high as 24%. That means that you're not only paying back the money you were advanced, but you're adding a substantial amount above and beyond the original amount, especially if you don't pay back the money immediately.

The Cycle of Minimum Payments

It's easy to fall into a pattern of paying a minimal payment on credit card debt. This means the credit card never gets paid off. And with most American families only one or two paychecks away from defaulting on a home or car, it makes sense to find out about debt consolidation loans.

Debt consolidation loans provide debt assistance by consolidating every one of your monthly payments. Credit counseling services will find out what your affordable monthly payment will be, and then negotiate with your creditors to reduce the interest rate on your outstanding balances. This means that debt consolidation loans could remove the stress of a number of different bills and payments, and allow you one easy, affordable payment each month.

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