Debt consolidation is a great option for those with various forms of debt – like credit cards, medical bills, payday loans, auto loans and more. With a loan for debt consolidation, you will pay one bill on your combined debt.
Many people pursue consolidation because it simplifies their finances and often offers a lower interest rate. Debt consolidation is basically refinancing what you owe. You can achieve this through a debt consolidation loan or even through a home equity loan. To learn more about simplifying your debt through a consolidation loan, continue reading.
Check your credit score
You should take your credit score into account when determining if you should apply for a loan. The better your credit, the better chance of getting a low-interest loan. Also consider whether your cash flow can cover the payments toward your debt.
One of the biggest reasons people seek consolidation is to receive a lower interest rate. If your credit score is not in great shape, you may not qualify for an excellent interest rate. You can discuss your concerns with a loan officer. They will help you determine whether a consolidation loan is right for your financial situation.
Consolidating your credit cards
It’s easy to end up with multiple credit cards and payments. Making sure you make the right payments at the correct time can become frustrating. Debt consolidation allows you to reduce those high-interest rates and monthly payments. Combining those cards into a single monthly payment can help you budget and stay on schedule.
When to pass on a loan
Debt consolidation is not for everyone. If you only owe a small amount and you can pay it off within six months, you may only save a small amount by consolidating.
Debt consolidation loans from FirstBank Southwest
We offer debt consolidation loans* to help you simplify your financial management. One of our loan officers can meet with you to discuss your options. Homeowners may qualify for a low-interest, home equity loan. Visit your nearest FirstBank Southwest location or call us at 806.355.9661 to learn more.
*With approved credit.