Guess what? You’re not the only one with debt. Most people are juggling several different payment responsibilities each month: credit cards, car loans, store charge cards, gas credit cards, personal loans and even student loans.
It’s easy to feel overwhelmed with so many different bills, different due dates, and balances that don’t seem to be going down quickly. When you hear the words “debt consolidation,” do you picture someone who’s in financial trouble? Actually, that couldn’t be further from the truth! Debt consolidation is for everyday people who want a smart, strategic plan to manage their debt.
A debt consolidation loan could not only simplify your monthly bill-paying (less checks to write & less payments to schedule), it may also save you some money! Some of your debts could be rolled into one monthly payment, with a lower rate. If you’re currently paying higher interest rates– especially on credit cards– you could end up with a lower payment each month and pay less interest in the long run. Cha-ching!
| TYPE | MONTHLY PAYMENT | APR | REPAYMENT TERM | PRINCIPAL BALANCE |
|---|---|---|---|---|
| Car loan | $228.42 | 9% | 24 months | $5,000 |
| Store credit card | $99.30 | 22% | 36 months | $2,600 |
| Gas credit card | $111.62 | 18% | 48 months | $3,800 |
| Credit card | $69.33 | 15% | 36 months | $2,000 |
TOTAL PAYMENTS: $508.67
Total amount of interest paid: $3,510.52
| TYPE | MONTHLY PAYMENT | APR | REPAYMENT TERM | PRINCIPAL BALANCE |
|---|---|---|---|---|
| Consolidation loan | $419.85 | 7.74% | 36 months | $13,400 |
Total amount of interest paid: $1,714.60
In this example, the family could lower their monthly bills by $88.82 in the short term, and save $1,795.92 in interest over the life of the debts!
Category: Budgeting & Debt Reduction
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Using debt consolidation as a tool to lower your monthly payments and interest If you’re like most Americans, you may be juggling several different payment responsibilities each month: credit cards, car loans, store credit cards, gas credit cards and even student loans. It can be overwhelming!
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