What Is Debt Consolidation?
A debt consolidation loan is a smart way of dealing with multiple debts at once. If you have multiple loans, such as a credit card, student loans or payday loans, debt consolidation allows you to roll off of these payments into one. You'll still be paying off the loan, but you'll be making just one payment, rather than multiple throughout the months.
Why is this so important? It means that you remove multiple annual fees and now have just one repayment and one interest rate to keep in mind. Better still, you may be able to negotiate a better interest rate, lowering interest paid over the life of the new loan. And while you will of course have to continue repaying your loan, it gives you some breathing room that you would not have had previously.
Why You Should Consolidate Your Debt
Consolidated credit card debt, along with other debts you choose to consolidate, can be greatly beneficial and offer you freedom from financial burden. But one of the greatest benefits it of course, that you'll be rolling multiple repayments throughout the month into a single once-a-month payment (assuming you repay your debt monthly).
In most cases, debt consolidation can also save you money on additional fees (such as yearly credit card fees), interest charged, and can benefit you mentally since is lessens the burden of multiple debts. Lastly, it will also get you into the habit of making regular payments, rather than sporadic payments here and there.
How The Debt Consolidation Process Works
To get started on your debt consolidation loan, take some time to sit down and make a list of all your debts, including the payment term, repayment rate and the interest rate of each debt. After this, calculate the total value of the debts you would like to consolidate and calculate the average of their interest rates. This will help you to determine what sort of interest rate you should be looking at when taking out a debt consolidation loan.
Once you have your numbers, start shopping around for a single loan that will replace all of your current debts. You can look for the lowest interest rate, or you can look for a longer repayment term, as just two things that can make payments more affordable.
If you are after a debt consolidation for bad credit, the good news is that it's quite rare to be knocked back for a consolidation loan, depending on your credit score of course.
How Much Can You Borrow?
The amount you can borrow when looking for a debt relief loan depends greatly on your financial institution and credit rating. To determine how much you need to borrow, you can use a debt consolidation loan calculator to help you figure out how much your repayments will be, how much you can borrow, and how you can repay your loan sooner.
Our general advice would be to borrow only what you need to cover your debts.
Why Choose Sunshine Loans?
We do express loans from $150 to $2000.
As the rainy day loan experts, we understand that often times in life, when it rains, it pours! With this mindset, we understand that people sometimes need a little extra help with their money, but we don't take advantage of the situation or overload you with new debt either. We are committed to responsible lending practices, and have a swift, paperless/faxless application process that should take you five minutes (tops!) to fill out.
We don't have hidden fees and our terms are clearly stated, so we don't try and trip you up. Plus, we can deposit money into your bank account as soon as the same day!
Apply For Your First Loan
So, you've decided that a debt consolidation loan is right for you? Great! Apply for your first loan with us today – our process is quick and simple and doesn't require mountains of paperwork.