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Multiple Debts To A Single Debt
High-interest debts, typically unsecured personal loans and credit cards, can cause you a great deal of both financial and mental stress. In addition to taking a toll on your finances, they even prevent you from achieving your short- and long-term financial goals. Further, the high-cost debt in your name can erode or empty your savings because of the interest that accrues over time. Now, you don’t have to lose sleep if you have multiple high-cost debts. You can convert your multiple debts into a single debt through a financial strategy called debt consolidation. Here’s why debt consolidation makes sense.
Multiple Cards to A Single Debt
When you use credit cards, you can avoid upfront cash payment. However, you have to pay card dues on or before a specific date. If you do not pay dues on time, card providers will slap penalties. The interest charged by credit card companies is much higher than that applicable to personal loans. Your financial situation can worsen quickly if you have multiple cards. One way of getting out of this mess is taking out a single lower interest personal loan that pays off outstanding amounts against your credit cards. You can repay this loan in easy EMIs.
Multiple Personal Loans To A Single Debt
A personal loan is a sought after financial product because it can be used to fund all kinds of expenses, including that associated with weddings, car repair, home renovation, hospitalization, and education, etc. However, if you have multiple personal loans in your name, you have to be extremely careful because they can impact your financial situation in a sneaky way. Now, if you are finding it a little bit overwhelming to make payments against multiple loans, you can make use of a single personal loan (debt consolidation loan) to convert your multiple EMI payments into one EMI payment.
Multiple Banks To A Single Bank
When you have many personal loans and credit cards in your name, you will be dealing with multiple banks or lenders and card providers. This is by no means an easy task. It can be quite challenging and stressful. If you are, for some reason, not able to make payments on time or default a couple of installments, you start getting calls from collection agents appointed by these lenders. As debt consolidation is all about combining all your debt into a single debt, you will just have to manage one lender.
Multiple Pay-by Dates To A Single Pay-by Date
One of the greatest challenges you will be faced with when you have multiple debts is keeping track of the pay-by dates month after month. You also have to ensure that there is sufficient balance in your account. If you fail to pay by the specified date, you will have to pay a penalty. This has the potential to topple your delicate financial balance. If you struggling to meet payment commitments, it is highly recommended that you take the debt consolidation route to get the relief you deserve. A buyout loan covers all your existing debts and you have to worry about only one pay-by date.
Note: CompareGULF is an online market research consultant, our experts would support you in choosing right financial choice and also loan products from the market. This blog should be used only for knowledge and information purposes. Consult with bankers before signing any agreement.