When you hear the term debt consolidation loan, what are the first thoughts that come to your mind? Do you think of getting out of debt? Or maybe you think of negotiating a settlement with creditors and obtaining a debt reduction? Or how about the thought that you will eventually achieve financial freedom?
A debt consolidation loan is simply a way of merging multiple debts into one single one. In other words, you take out another loan to pay off your existing debt. Together with the combined interest rates, this loan will help you manage your debt and reduce your debt in total. Sounds good, doesn’t it? It is, as there are some proven benefits of debt consolidation.
One of the most obvious and significant debt consolidation loan benefits is reducing debt. Once you get your consolidation loan, the total amount of debts you have will become easier to manage. You will only have to handle a single lender instead of many. Also, you’ll only have to make one monthly payment instead of several. You will also make your payments on time, which is very important to maintain a healthy credit score.
