How Does Debt Consolidation Work?

Paying Your Loans

April 2, 2021

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How Does Debt Consolidation Work?

Few things in life are more stress-inducing than juggling multiple bills with varying payment amounts and due dates. Miss or confuse a payment and you could be hit with major late fees and penalties.

Enter the debt consolidation loan.

What’s a debt consolidation loan?

A debt consolidation loan allows you to borrow money and pay off a variety of other debts, including things like high interest credit cards, medical bills or personal loans. By rolling these debts under a single consolidation loan, you only need to make one monthly payment instead of paying multiple bills on different dates throughout the month.

What are the benefits of a debt consolidation loan?

If you’re struggling to manage multiple payments, a debt consolidation loan is a great way to simplify and streamline your monthly finances. A few benefits include:

  • You’ll have one stress-free monthly payment. Simplicity is a wonderful thing, especially when it comes to your money. By consolidating your debt, you’ll make one monthly payment instead of managing the monthly stress of different bills and due dates.
  • You may spend less money. We’ll work with you to determine a single set monthly payment that works for your budget. No more worrying about late payments or fees! 
  • No surprises. With a fixed interest rate, you’ll know exactly how much you’re paying each month and when. 

Are there any downsides? How do I know if a debt consolidation loan is right for me?

There are things to consider when it comes whether a debt consolidation loan is the right option for you, especially the total monthly payment amount. With a debt consolidation loan, you will have a set amount of time to pay off your borrowed amount. This means your monthly payment could be higher than what you are paying to make the minimum monthly payments on multiple debts. It’s a good idea to do the math ahead of time to ensure that the consolidation payment amount works within your budget.

A consolidation loan won’t solve all your financial struggles, but in addition to creating a budget and evaluating your spending habits, it can make it much easier to get back on track and Back to the Good.

If you’d like to learn more about World’s debt consolidation loans contact one of our convenient branch locations. Find your nearest here.