Debt Consolidation Loans

Taking out a debt consolidation loan won’t hurt your score in any significant way because you are basically paying off everything you owe. Indeed, when you start consolidating your debts (either taking out a loan or going for a consolidation company), your score will go through a temporary drop; however, once you start paying everything off, that credit rating will eventually go up again.

Yes, you are allowed to choose the debts that you want to be consolidated. You can opt for consolidating all of your debts, or you may leave some of them out – whichever you want.

Well, for one, if you get a debt consolidation loan, it helps you by putting all of your payments in one place – so you will no longer have to lose time and go to different banks and lenders. Since it will all be in the same place, it should be done very quickly.

Secondly, it will help you in the matter of interest. If you have multiple loans, you also have variable interest rates that you have to pay off. Cumulated, that will cost you a lot in the long run. While debt consolidation loans may have a higher interest rate, it will still be more convenient when compared to having multiple ones. Even 1% will help you save money, especially if you have a long payment plan ahead of you.

The duration of your debt consolidation plan will depend on several factors. First is the amount of money that you have to pay; the more you owe, the more time it will likely take to pay. Secondly, it will also depend on how much you can put aside every month for the loan. The more you can afford, the faster you’ll be able to pay off your debt. 

The average of every loan payment is four years (not including mortgages, which take longer), but you can settle for anywhere between two to seven years, depending on the lenders policy.