Should I use a personal loan to consolidate debt?

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Owing money can be a huge financial burden and it can also be logistically difficult to keep up with multiple creditors if you have several different loans outstanding. If you’re tired of sending in multiple monthly payments, debt consolidation through a personal loan could be the solution you’re looking for.

When you consolidate debt in this way, you take out a loan from a bank, credit union, or online lender. You’ll use the loan proceeds to pay off some or all of your existing debts, depending on how large your loan balance is and how much you owe.

These types of loans are a great tool for debt consolidation because you have flexibility in what you use the loan proceeds for and because you can often borrow at a reduced rate compared with other kinds of debt, such as credit card debt. But while using this type of loan to pay off creditors could both save you money and simplify repayment, it’s not the right choice in every situation so you need to consider the pros and cons.

What types of debt can I consolidate with a personal loan?

One of the best things about these loans is that you can use the money you borrow for virtually anything you want. That means you can pay off almost any debt you owe with the proceeds from a personal loan including:

  • Credit card debt
  • Medical debt
  • Payday loan debt
  • Other loans

However, you want to make sure you’re only repaying the debt that has an interest rate above or equal to the rate on your loan. Otherwise, you’d make debt repayment more expensive.

You can visit Credible to find the best loan rates and decide what debt it makes sense to pay……..Read More>>

 

Source:- foxbusiness