Do you have multiple loans or debts to pay every single month? If your answer is positive, it is likely that you are finding it hard to keep up with all the payments you should make, while at the same time, making sure you have enough money to cover all the necessary household expenses. This is something many of us have to deal with. The good thing is that there are debt consolidation loans available. When consolidating debts, you take out a single loan in order to pay off all the money owed. In effect, you need to make payments for only a single loan every month.
Are Banks Giving Debt Consolidation Loans?
Loans for debt consolidation are offered by various lending companies, credit unions, and even banks. If you want lower interest rates, you will be better off with banks. However, most banks approve applications for consolidation loans using the borrower’s home equity. Nevertheless, there are many advantages to taking out a consolidation loan from your bank.
One advantage of getting a debt consolidation loan from a bank where you have an active checking or savings account is that you can enjoy reduced rates. In most banks in the country, those who have an existing account, can apply for a debt consolidation loan and then receive up to 25 percent of the discount. It is possible if you agree to have your monthly payment deducted automatically from your bank account.
By getting a debt consolidation loan from your own bank, you will not have to guess and wonder how much you should make every month. Upon approval of your application, you will be informed of how much you will pay per month and how long the loan will take to repay.
Debt Protection Scheme
In certain banks, debt consolidation loans come with a debt protection plan where you may continue with your monthly payments in case of accidents, illnesses, unemployment, and even death. This will all depend on the kind of benefit you will choose. To learn more about this plan and the schemes to select from, you can contact your local bank representative.
If you want to be able to finish paying off your loan immediately, you can opt to make extra or even early payments. This way, you can also enjoy reduced interest rates. But then again, you have to make sure that despite your monthly payments, there will be enough money left for your household expenses. There is no point in rushing the payment of your debt consolidation loan if you need to get more loans to cover your expenses.
Loan Term Extension
If, for any reason, you would like to extend your loan, you can negotiate it with your bank. As long as you can prove that you are a good borrower and can pay off your loan on a consistent basis, you should have no problems with having your request complied with. By prolonging the term monthly payments for debt consolidation loans can be made lower and more affordable.