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Debt Consolidation Loans Directory
With the many lines of finance currently available on the market it
can be easy to obtain loans and credit from a range of sources. Because
these are taken from different lenders the interest rates from each
can be fairly high. These can soon mount up and many people find themselves
struggling to pay off the interest and initial capital.
One of the solutions for this is to take out Debt Consolidation
loans. A debt consolidation loan is basically a single line of
finance which the borrower uses to pay off their multiple lines of
credit.
By having this single loan from one lender the finance is more
manageable – you
do not have to track and remember lots of different payments. The
main advantage for debt consolidation loans over multiple lines
of finance however, is that of the interest rate. The single loan
will
have a lower rate of interest than separate loans, and so will
save you money, making the initial amount easier to pay off.
Here is an example:
Joseph has a credit card balance of one thousand pounds, at an interest
rate of fifteen percent. He also has two loans, each for two thousand
pounds and charged and eleven percent. In total he pays annual interest
of five hundred and ninety pounds or around fifty pounds interest
alone per month.
Now Joseph takes out a debt consolidation loan of five thousand
pounds. This is charged at eight percent interest and covers all
the other finances. Joseph now pays four hundred pounds of interest
per annum. He therefore saves one hundred and ninety pounds in interest
each year. This makes the debt easier to pay off. |
