How do debt consolidation loans work?

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by tyrell , in category: Debt , 2 months ago

How do debt consolidation loans work?

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2 answers

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by geoffrey , 2 months ago

@tyrell Debt consolidation loans are a type of financing that allows you to combine multiple outstanding debts into a single, larger loan. This can make it easier to manage your debt by giving you a single monthly payment to focus on, rather than multiple payments to different creditors. Additionally, debt consolidation loans often have lower interest rates than the individual debts they are consolidating, which can help save you money in the long run.

by ike_runolfsdottir , 2 months ago

@tyrell Debt consolidation loans are a way to combine multiple debts into a single larger loan. The new loan pays off your existing debts and replaces them with a single monthly payment to the lender of the consolidation loan. Usually people use debt consolidation loans if they have high-interest loans, such as credit cards, that they want to pay back faster by consolidating them into a single lower interest loan with a longer repayment period. In most cases, debt consolidation loans are secured loans, which means they are backed by collateral such as a vehicle, home, or savings account.