Consolidation is a way to pay off your debts in an easier way because instead of making several minimum payments in different accounts, you will get a loan to add and cover all your other loans in a single installment. This strategy will make you live more relaxed, but why? In this article we will tell you:
You will simplify your payments
Consolidation is an ideal strategy if you have several debts because it will unify them and you will make a single monthly payment. Instead of being pending of several dates of payment you will only be pending of one.
More than the minimum payment
When there are several debts, we often pay only the minimum, which implies higher interest payments and a longer time to pay off those debts. What you will achieve with consolidation is to avoid increasing the duration of the debt and the interest that this entails.
Good credit record
If you pay your debt consolidation credit on time, you will avoid any damage to your credit history, so we recommend that you keep the payment date in mind
Tips that you should keep in mind to consolidate your debt
- Verify that the bank in which you will carry out the consolidation is reliable, has support and provides you with all the information you need to clear all your doubts.
- Inform the bank that you will need the credit to consolidate your debt so that they can offer you a solution adapted to your requirements, needs and financial capabilities.
- Request the time in which you consider that you will pay off the debt, in this way you will not risk your peace of mind or your personal finances.
- Take advantage of the experience of bank agency executives, as they will be able to advise you on the most viable option
Consolidating your debts will make you live more relaxed because instead of having different loans or credits with different interest rates and payment dates, you will unify them all and you will only have to keep a record.
Debts with your credit cards?: Unify them with a financial institution.
Credit card debts are the most common among users. It is very easy to get out of control and spend more money than we have
If you have different credit cards that you owe money to, consider exclusively consolidating these types of debts into a single loan.
This means that they lend you money to pay those debts and now you will only have a single installment in your pending payments for the month, corresponding to the loan.
How to avoid more debt in the credit card?
- Do not use them unless necessary: such as in basic products, emergencies or accidents when you have no money.
- Don’t fall for impulsive purchases: nothing outside the planned budget.
- Pay your installments on time and prevent the debt from growing due to interest on arrears.
Difference between consolidating and refinancing debts
When you refinance, the bank can change some conditions (such as interest rate or term) to achieve lower installments that are more comfortable to pay.