Consolidation of Bills before the holidays, consider a personal loan

Getting your finances in order is always a wise choice. However, when the holidays are approaching, you may feel overwhelmed with the upcoming costs, which makes the need to arrange your finances a little more acute. If you have several different loans and find it difficult to keep track and up to date with all the separate repayments, then it is definitely worth your while consolidating your loans into one manageable payment. To do this, you can take out a personal loan for high-interests debts, and in this case, the loan is known as a debt consolidation loan. 

What is a Debt Consolidation Loan?

There is no special loan known as a debt consolidation loan. It is simply a personal loan that is being used to reorganize other debts. Although a lender may advise you of the benefits of such as loan, it is no individual category for this specific purpose. A debt consolidation loan though can be used to pay off one or more other debts such as personal loan debt, credit card debt, store card debt, car loan, and an overdraft, etc. Consolidation just means that you are creating a strategy of placing several monthly loan repayments in one single payment. The loan can be secured or unsecured. A secured loan means that you are putting an asset up as collateral, such as your home. Unsecured means that it is not secured against any asset. However, you will need a good credit rating to benefit from the best low-interest deals. The holidays may well be the best time to do this as it can help you manage the holiday season, reduce your stress levels, and you will not receive any payment chasing calls.

When to Get a Debt Consolidation Loan?

There are many things you should consider before getting a debt consolidation loan.

  • You need to ensure that the savings you will make are not negated by charges and fees.
  • You have to be able to afford the repayments. 
  • You are wise and learn to cut back and live within your means. 
  • That the amount you are paying is less than the sum total of the amounts, you were paying before.
  • You will be paying less interest, and the length of time you are paying for is reduced.

Other Considerations

What would happen if some unexpected event messes up your plans in the future, such as the interest rates increase or you lose your job. How would you manage? If you are currently struggling and often use a credit card to pay for certain household bills, etc., you may need to come to terms with the fact that you are struggling financially. You probably need more help than a consolidation loan can offer, as that will not solve all your problems. If this sounds like you, then you are far better off discussing your finances with a financial planner. They will look at your financial situation in a holistic approach and work out a real workable plan going forward.  

 

  • Short-Term Lending and Personal Loan FAQ Guide

    Borrowing money for the first time can be intimidating. There is a whole range of financial tools used by lenders to determine the borrower’s creditworthiness. For good reasons, however, personal loans and short-term lending are increasingly becoming popular for covering sporadic and massive expenditures.

    Here’s a guide that covers short-term lending and finding the best personal loan that suits you.

    What are business needs suitable for short-term financing?
    Different types of short-term lending are appropriate for varied business needs. Examples of needs projected to have short-term ROI include physical renovation, hiring new staff, and purchasing new equipment.
    Is APR an ideal way to make cost calculations?
    The annual percentage rate is only a single way to represent total interest cost and fees as a yearly payment which may appear higher than the overall cost of a short-term loan. When you look at other factors like the total cost of your loan and different business needs, you’ll realize that a short-term loan would better fit your business needs. At a glance, a short-term loan with a higher APR is more affordable than a long-term loan with a lower APR.
    How long does it take to receive a response?
    Depending on the loan issuer, your credit history and loan amount, the typical wait time could be 45 minutes or less. However, some lenders could take up to 3 working days to approve, it will vary from lender to lender and based on your unique lending needs.
    How does the lender determine the interest rate?
    Your personal short-term loan interest rate is determined based on your risk profile. The general rule is that the lower your credit score, the higher the risk. Lower risk means a lower interest rate, and higher risk means a correspondingly high interest rate.
    How long will I have to repay the loan?
    You’ll have to begin repaying the loan within 30 days in installments. Most lenders provide repayment terms ranging from six months to six or more years. The interest rate and monthly payment will be impacted by the period you choose to repay the loan.
    Are there other fees associated with personal loans?
    Creditors may charge sign-up, processing coupled with landing fees. In most cases, these charges are billed only once and are often outlined in the application documents. Although it’s not uncommon to have obscured payments, hidden fees would generally add up between 1 to 5% of the entire amount.
    Do I need a good credit score?
    Before you start applying for a short-term personal loan, it’s crucial to know you’ll qualify with your credit score. Most loan issuers are looking for customers with good credit scores. However, if you have a good relationship with the creditor, you may get a favorable term, particularly if your account shows a history of timely payments and honoring the terms of past loans.
    Can I get a loan with a low credit score?
    Loan issuers have different loans designated for people with varying credit scores. Lending options meant for consumers with bad credit are, without a doubt, different from those with good scores. While a higher score boosts your approval chances and gives you favorable terms, there are specific loans meant for people with low credit scores.
    How do I apply for a short-term personal loan?
    Once you’ve identified the financing option ideal for you, assemble all the documentation needed. Do not yield to the pressure to have money as soon as possible to offset the chances of making a shoddy application. It’s always good to fill the documents comprehensively, attach personal information, your resume if needed, business and personal tax returns, financial statements, and the collateral value that may be required.
    Will the lender approve my application?
    Your business and personal credit will be essential metrics in determining a lender’s decision. At its core, one of the handiest tools used by the lender is looking at your credit score. At the same time, other factors include your debt ratio, business debt, revenue trends, personal and business debt coverage.

    How do I improve my chances of getting approved?
    It sounds harsh that most loan requests are rejected. Looking at the reasons that contribute to applications’ inevitable rejection, the ideal way to improve your standing is to build your credit score. Aside from convincing the lender that you’re better suited for approval, a healthy credit score helps you qualify for favorable interest rates.

    Personal Loan Markets

    Innovative Finance helps connect consumers who are searching for help with consolidating debt, home improvement projects, credit card consolidation and more with online personal loan lenders. If you are searching for an online, unsecured loan product and live in these markets, we have lenders who may be able to assist you.
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    Las Vegas, Phoenix and Raleigh

     

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