A credit card consolidation loan seems like a very good idea for everyone who has a lot of smaller debts and wants to unite them in one. This is very convenient, but like anything, this way of debt management has its drawbacks.
A professional credit card consolidation service will eliminate some of those, making sure you get the best experience possible!
Pros of Credit Card Debt Consolidation
Here are some of the most beneficial advantages of credit card consolidation:
- You repay the debt sooner.
You have one payment date, one interest rate, one lender, after all. It’s much easier to handle one loan once a month than trying to handle several on different days.
- You simplify your finances.
It’s much easier to plan your monthly spendings when you have one loan. You won’t miss a payment due to forgetfulness or date confusion.
- You get a lower interest rate.
Credit cards are great until you miss a monthly payment. Then, the penalties and fees get pretty high. Getting a consolidation will lower the rate and it will be easier not to get any penalties.
- You pay in fixed installments.
Even if you’re good at planning, having a fixed payment schedule for one loan is so convenient! Besides, there’s only one sum of money to remember.
- You improve your credit score.
Many people that have multiple loans have a mediocre or even low credit score. Repaying all of those with the money from a consolidation loan and then repaying it time will increase your score by much!
As you can see, the benefits are plenty. So, if the disadvantages aren’t too important for your situation, consider credit card consolidation. And even if the cons bother you a lot, by getting a specialist consultation you’ll avoid most of the issues.
Cons of Credit Card Debt Consolidation
Here are the objective disadvantages:
- It won’t resolve all financial issues.
A consolidation loan won’t resolve your issues on its own. You have to help it by repaying monthly installments timely.
- It may involve upfront payments.
The origination, balance transfer, annular, closing fees are present to some extent in almost every loan. Make sure you find out what fees you’ll have to pay upfront and which of them it’s possible to avoid.
- It may involve higher interest rates.
If you’re applying for an unsecured loan (meaning you don’t provide collateral), the interest rates may be higher. You’ll still benefit from monthly payments, but the rates might be quite high.
Choose a way out depending on your case and preferences. But do choose that way, whichever it is. Don’t leave debts hanging around for your whole life. This won’t make it better!
Make sure to find a specialist to arrange a consultation with. An expert will help you choose the best way to consolidate all your debts and repay the resulting large loan on time. This might need some investment, but it’s truly justified by the result, your debt-free life!