It is hard to cope with your living expenses when you have a lot of high interest debts that are waiting for you to repay every month. You can solve this problem by using an online personal loan to consolidate your loan. The following are the 3 reasons for getting an online personal loan to consolidate your debt.
1. Low Interest Rate
The main reason why you should obtain a personal loan is that it has a lower interest rate. Personal loans that have interest rate lesser than 10% are considered as low interest personal loans You want to look for a personal loan that has an interest rate in the range of 6%-8%. With a good credit score, you can easily qualify for a low interest personal loan to consolidate your debt. Lower interest rate means that you can pay off your loan within a shorter time frame. To find low interest loan, you must first perform comparison on a loan search engine and submit the loan preapproval forms. If you have question, you can always call their hotline number and ask the representative all the questions in your head.
2. Only Have to Make One Payment Every Month
Every credit card has different deadline and it can be hard to remember which card to make payment on which date. You will end up missing payment on one or more cards even if you record down the date on the calendar. When you miss a payment, they will report it to the credit bureau and it will affect your credit score negatively. Consolidating your debt with a personal loan will make it much easier to manage your repayment. Now, you only have to make one payment to the lender. It is easy to keep track of your payment history and see how much balance you still need to pay when you login to your account. Some lenders will help you to distribute the funds to all the lenders that you owe.
3. Pay Off Your Loan Faster
Unlike a credit card, the online personal loan has a set repayment period. You just follow the repayment schedule and pay the fixed amount every month. In credit card, you are given the option to make minimum payment. When you are given the option to pay lesser payment, you would probably not want to pay your balance in full. For this reason, it is hard for a person who is not disciplined to pay off a credit card debt. Most people will take 10 years or more to pay off their credit cards. However, with a personal loan, you can pay it off in 3 – 5 years if you are consistent in making repayment every month.