Between your home, your family, and the surprises of life, balancing your family’s budget can be a hard task even at the best of times. However, failure to properly repay expenses can have serious long term consequences when your debts grow larger and potentially lead to bankruptcy.
Retake control of your life and your credit by streamlining your finances with a consolidation loan.
What is a Consolidation Loan?
A consolidation loan allows a credit union to gather your different credit cards and debts into one streamlined loan to pay off. Consolidation loans work in this order:
- The credit union looks at your various outstanding credit card debits and bills.
- The credit union creates a loan for you, equal to the value of your debt.
- With this single loan, you can pay off all of your existing bills and credit card debt.
- The consolidation loan is now your only debt, which helps simplify the payment process.
Consolidation loans have the added benefits of lower interest rates and longer payment terms than regular loans, meaning that you will spend less over time repaying your loans.
How Can a Consolidation Loan Help Me?
Consolidation loans can be a great help for those who struggle with finances, as they turn your debt into a single, easy-to-pay loan that can lead you to the path of financial stability. Different consolidation options exist for different debts, including credit cards, student loans, and home loans, meaning you can find the right package that works for your needs. By paying off all of your previous debts, consolidation loans can simultaneously improve your credit score and peace of mind.
However, there are still risks involved with consolidation loans as there is no guarantee that you will be approved for one. Credit unions will not provide consolidation loans to individuals who lack security, credit history, or income to pay it off. Also, if your spending habits do not change after gaining the consolidation loan, you could risk increasing your debt and losing your collateral.
Transform that mountain of bills into a molehill of ease with a consolidation loan from Encompass Credit Union today. Check us out online to find the closest branch to you and get back on the path to financial freedom.