Escape Killer Interest Rates with Debt Consolidation
Nothing beats killer interest rates lurking behind your auto loans, credit cards, utilities and mortgage. If you’ve haphazardly chosen a bad credit loan without looking at its hefty interests, then that’s a monster you need to get rid of, early on.
One of the most practical solutions for people short on cash with bad credit and limited loan options, is debt consolidation. The benefits?
It absorbs large balances and interest rates on your credit cards
Have you been carrying large balance on your credit card because of overspending? You are most likely to do so when you are using your credit card as a payment mechanism instead of a backup when you run out of cash. With the plastic card and its credit limit, you may forget for a moment that what you are spending is not cash that you have on hand, but you are charging it on your future income. Consequently, your tendency to overspend is high because of the credit limit, compared to purchases you can make when you use the limited cash you have on hand. But, when you consolidate your debt make sure that you stop spending using your plastic card. Instead, use the card sparingly, or never, until you finally get back on track. You can just use the spare cash you have after you paid off your credit card balances through debt consolidation loan.
You will no longer run the risk of losing your car
Let’s face it … auto loan is really expensive. You default on it once; you may wind up paying more the next month—and so on. Using it can be more expensive-if you take gas and emergency repairs (or even toll fees) in consideration. If you aren’t making enough to pay for your monthly auto loan you can consider debt consolidation as an easy way out.
Let’s say you only have 12 months left to pay for your car in full. But the rent or mortgage, utilities and groceries are adding up while your income isn’t getting any further. You also have credit card balances and personal loans to pay. When you consolidate your loan, you pay them all off—and you also lessen the interests, save money on late fees and possibly pay off the loan quickly than you realized.
You can save up to 400% annualized rate on payday loans
The payday loan industry is booming because people with bad credit are having a hard time in gaining access to traditional forms of credit.
But, interest rate can increase to around 400% in a year, which makes it almost impossible for borrowers to recover quickly from debt. Still, many others prefer payday loans because lenders approve loans 24/7 and release money to customers quickly, without any need for utility bills or other documents that traditional banks require. what you might be missing is the fact that there are reputable online lenders like ALC Commercial that offer better loan terms, lower interest rate and even faster processing times than traditional payday lenders. If you don’t want extensive background check, loads of documentary requirements and having to explain why you have a bad credit, debt consolidation loan from ALC Commercial can help you.
Overall reduction in interest
Save money by paying off your large credit card debts. Remember that with each monthly payment you are not only servicing the interest that has accrued, you are also paying more in interest and fees if you cannot make the minimum payment. IT happens when your monthly payment is large and you cannot afford to pay it. The scenario is even more difficult if you have several credit cards and they have high balances.
A debt consolidation loan can reduce the overall interest of the amount you’d pay on your credit cards. But, make sure that the interest rate of a debt consolidation loan is lower than all your credit card debts and personal loans combined.
Improve your Credit Score
What will happen to your credit score if you don’t consolidate loan today? Perhaps, it may get worse particularly if your income remains the same. And because it may be difficult for you to make progress into clearing your numerous debts, those debts may not be marked as paid anytime soon.
But, if you take out a loan to consolidate those debts, they would be paid immediately. Consequently, your outstanding balance would be consistently reduced as long as you keep up with your repayments on a single loan. When the utilization arte of all your credit cards or line of credit go down, and your total debt balance decreases, your credit score will improve as well.
If you decide to take out a debt consolidation loan, contact us and we will walk you through the process.