Should you consider a debt consolidation loan, and how may you benefit from it?

You may wonder if a debt consolidation loan would be an intelligent way to Alleviate stress from credit cards, personal loans, or medical debt. 

So, how do debt consolidation loans work, what are some other ways to consolidate your debt, and what type of debt can be consolidated? 

We’ll go over what considerations to keep in mind regarding debt consolidation, if other options may be better, and how you might be able to get debt help.

Do You Really Need A Debt Consolidation Loan?

Who are debt consolidation loans good for? Depending on your current credit, taking out a loan to consolidate debts may or may not be worth it. What are some of the criteria for deciding whether or not a debt consolidation loan is your wisest choice?

Good Credit Score But Maxed-Out Cards

Consolidating credit card debt into a single loan might be a solid choice if your credit cards are frequently or always maxed out and your credit score is still in good shape. Sometimes life throws you curveballs, and you have to overutilize your credit cards, but then the interest charges make it next to impossible to pay them back down. This doesn’t always result in huge credit score drops, so sometimes converting the debt to simple interest can make it easier to pay down quicker.

The key here is good credit because the debt consolidation loan needs to have a low enough interest rate for the deal to make financial sense. 

If your credit scores aren’t very good, but you have maxed out credit cards and can’t get them paid down, one option is debt relief services from a company like Alleviate Financial Solutions, which combines all of your debt into a single payment and also negotiates better balances on your behalf.

It’s Hard Paying Your Minimum Credit Card Payments

If paying the monthly minimum payments on your credit cards is a struggle every single month,  a debt consolidation loan might be helpful. A debt consolidation loan can bring your total monthly debt bill down while making a bigger impact on debt reduction with every payment you make.

You Recently Lost A Main Source Of Income

If you or your spouse recently lost their job and it was the main source of household income, a debt consolidation loan might be a way to stay afloat financially. As we mentioned before, though, you’ll need good credit to qualify for a sensible rate. If a loan isn’t an option for you, alleviating your financial stress is still possible with Alleviate Financial Solutions’ different debt relief programs. Call today and learn what help is available for your family.

What Are Other Debt Relief Alternatives?

If a debt consolidation loan doesn’t really make sense for your financial situation, there are still plenty of alternative ways to get debt relief. That said, not all debt relief help makes sense for every person’s circumstances. Chapter 7 bankruptcy, direct negotiation with creditors, and debt settlement are some options. Let’s go over your alternatives to a new loan. 

Calling Your Credit Card Companies For Help

If you’ve only recently fallen on hard times, your credit card companies might be willing to help you out if you give them a call and explain your financial issues. They want to keep you as a paying customer for as long as they can, so as long as you haven’t fallen far behind yet, there’s a chance of them extending some goodwill.

When calling your credit card companies is something you don’t feel comfortable with, Alleviate Financial Solutions can help. We assist people in the debt negotiation process by dealing with creditors on their behalf, often saving our clients thousands in interest charges and fees.

Is Bankruptcy The Only Way Out?

For sure, bankruptcy, either chapter 13 or chapter 7, should always be seen as a last resort when there is no hope of paying off your debt anytime soon. When filing bankruptcy, the damage done to your credit is so severe it can take up to ten years to recover from. Unless your financial prospects have no chance of improving in that timeframe, there are likely far better alternatives for the debt relief you need. Debt relief companies are one such alternative. Contact the team at Alleviate Financial Solutions today to learn what your options are.

A Debt Settlement Program Might Be Better

Debt settlement programs are often a better form of financial debt help than bankruptcy. You’ll be able to alleviate your debt faster and with far less impact on your credit. With debt settlement, professional debt negotiators contact your creditors on your behalf to work out a reduction in your unsecured debt balances in return for a lump-sum payment or payment plan that will typically get the debt paid off in only a few years—much better than bankruptcy!

Will A Debt Consolidation Loan Work For You?

Simple Interest For Faster Payoffs

The primary benefit of a debt consolidation loan is the way the interest is structured. With credit cards, the debt is revolving, which means every time your balance carries to the next month, you’re charged interest on the entire amount. This means you’re paying interest on top of interest each and every month. With a consolidation loan, you’re only charged simple interest with a defined end date, so your total interest charges can save you tens of thousands in the end.

Secured Accounts Typically Can’t Be Consolidated

When debt is backed up by tangible assets like cars and houses, this is considered secured debt. Secured debt loans are simple interest, much like debt consolidation loans, so there’s no real benefit to consolidating these debts with a consolidation loan. And, secured debt can’t be combined anyway, as it’s backed up by real property that secures the repayment of the loan to the bank. 

One exception is student loans, which aren’t secured but can sometimes be combined into one loan, but only through student loan-specific lenders.

Debt Relief Assistance From Alleviate Financial Solutions

Alleviate Financial Solutions is here to help you with credit debt company negotiations to help you consolidate your unsecured debt. Whether you’re considering a debt consolidation loan, debt settlement, or are unsure which options you qualify for, we are here to guide you every step of the way to financial freedom.

Contact the Alleviate Financial Solutions team today!