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Consolidated Loan – Simplify and Save

Consolidated Loan – Simplify and Save
Betsalel Cohen
UpdatedApr 3, 2024
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    3 min read

Debt Consolidation Loan – Easier to Track

Many people are paying multiple credit card bills, sometimes with interest rates in the high 20%. In addition, medical bills and other personal debt create a lot of debt to track. Missing a payment causes a bad mark on your credit.

Keeping track of your bills and making sure that they are paid on time is an important financial task. Late payments are a major cause of a bad credit score. As a start, it is a good idea to set up automatic payments.

One way to simplify life is to consolidate your debt with a debt consolidation loan. In general, a consolidated loan has a 2-5 year repayment schedule. However, in order to qualify for top rates you will need excellent credit. If you have bad credit, then carefully consider other debt relief options.

Federal Student Consolidated Loan

If you have federal student loans, then consider all of your repayment options. Read this page for detailed information about your repayment options including deferment, forbearance, and Income Based Repayment plans. Before you consolidate your federal student debt, learn more and carefully consider the pros and cons and avoid harming your eligibility for any other program.

Consolidated Loan – Ease Your Financial Burden

If you are paying high interest rates, having trouble keeping track of all of your bills, or just want to put yourself on the fast track to paying off your debt, then a debt consolidation loan is a great option.

A consolidated loan allows you to ease your financial burden by putting a number of bills, credit cards, and loans into one payment. Not only do you have one payment to make, but you also benefit by reducing the interest rate and setting up a monthly payment plan that eliminates your debt.

For example, if you have several credit cards amounting to $20,000 in debt at 18% (and make minimum payments of 2.5% of the balance, but not less than $20), then you will end up paying $29,231 in interest and pay for the next 31 years and 10 months. Your beginning payment will be $500 and gradually decline.

However, depending on your credit and your financial situation, with a consolidated loan, you can set a fixed payment schedule and possibly lower your interest rate. Even if your credit is not excellent and you receive a consolidated loan at 12% for 5 years, you will lower your monthly payment to $444 and decrease your total interest payments to just $6,693.

Do You Qualify for a Consolidated Loan?

Check out sister company, FreedomPlus and see if you are eligible for a personal debt consolidation loan.

Is a Consolidated Loan My Best Choice?

A debt consolidation loan is one great debt relief option; however, it is not always the best option. Here are a few things to take into consideration:

  1. Check your credit: If you have poor to fair credit, then a consolidated loan is generally not a good option. Avoid payday type loans that consolidate bills and put you into a debt trap.
  2. Check the terms of the loan: Make sure that the interest rate and fees actually lower your overall financial costs.
  3. Make sure that the payment is affordable.
  4. Check out your other debt relief options.
Get Debt Assistance through Debt Navigator

Not sure that a Consolidated Loan is your best solution? Let Debt Navigator help you choose the debt relief solution based on your personal situation.

Did you know?

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q4 2023 was $17.503 trillion. Student loan debt was $1.601 trillion and credit card debt was $1.129 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in New Hampshire, 18% have student loan debt. Of those holding student loan debt, 5% are in default. Auto/retail loan delinquency rate is 2%.

While many households can comfortably pay off their debt, it is clear that many people are struggling with debt. Make sure that you analyze your situation and find the best debt payoff solutions to match your situation.