And consolidating loans
Consolidating your debt is especially helpful if you struggle to keep track of your payments.
If you’re considering a debt consolidation loan, try Fairstone’s free debt consolidation calculator.
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When you pay off debt with a consolidation loan, you only owe money on the new loan, helping to simplify your debt repayment schedule and reduce interest charges, particularly if some of your old debts were overdue. It’s simple: The best way to consolidate debt really depends on your goals. Choose monthly payments – you’ll be less overwhelmed since you only have to remember one deadline a month. No matter your payment schedule or loan term, consider setting up automatic payments – the money will come out of your bank account on the day you choose.
(You can learn more about choosing a credit counselor here.) If you don’t pay your debt, creditors could hire debt collection agencies, which could lead to a lawsuit, the CFPB says.
Not paying creditors will also show up as a negative transaction on your credit report that makes it harder to borrow more money.
We compiled everything you need to know about consolidating debts, and getting a debt consolidation loan, to help you decide if it’s right for you. It involves taking out a new loan or line of credit large enough to cover the debts that someone owes.
Then, their outstanding debts are paid off and the person begins paying the new loan or line of credit, typically at a lower rate or with an easier payment schedule.
Once you’ve paid off your debts, you’ll only have to make payments on the consolidation loan. Learn more about how a debt consolidation loan can simplify your life. In just a few minutes, we’ll tell you how much money you could qualify for and what your payments might be.