National Debt Relief Shares Pros and Cons of Loan Consolidation
New York, NY (PRWEB) June 10, 2014 -- National Debt Relief recently discussed in an article published last June 9, 2014 the advantages and disadvantages of loan consolidation. The article titled “3 Reasons To Consolidate Debt And 3 Reasons Not To” shared some insights for consumers to know when consolidation will work best depending on the current financial situation.
The article shared how the total US debt has seen an increase of $129 billion from the last quarter of 2013 to the first quarter of 2014. The increase in debt is due to increase in mortgage debts, auto loans and student loans. It is because of this increase that loan consolidation is gaining popularity as a go to option in getting consumer’s finances in line.
There are many benefits that a borrower can take advantage of when consolidating loans. Most evident would be streamlining payments because the consumer would only have to deal with one set of details. This means one payment amount, one interest rate and one due date. This simplifies the debt payment of the borrowers and takes away stress of dealing with numerous payment details.
Having an extended restructured payment is another benefit of loan consolidation. It lays out the payment at a longer term compared to the original debt timeframe. This helps the borrower schedule the budget easily over a long period of time. Another benefit is a lower interest rate. Loan consolidation is able to offer lower payment to borrowers because of a reduction in the interest rate.
As borrowers are looking into loan consolidation, the article also shares instances where undertaking it would work for the benefit of the consumer. On top of the list is being able to meet the payments. Loan consolidation will work effectively for borrowers who are able to meet the current payments and are just looking for a payment reduction. Another consideration is if the consumer will have a stable source of income for a long time.
The article shares also that borrowers should be open to the idea of a bigger interest payment. The monthly payment may be small but over the course of time, the interest payment will come out bigger than the original loan. Consumers must be able to accept this fact in order for loan consolidation to work.
Loan consolidation works for borrowers that know the benefits of the program. Consumers that do not know the root cause of debt in the finances might not be able to maximize loan consolidation. This is because chances are high that the same cause of debt will creep up again and wreck havoc on the finances. Having income sources for the payment and having the time to meet the long payment term are also prerequisites for loan consolidation to work.
To read the rest of the article, click on this link: http://www.nationaldebtrelief.com.
Paul Ritz, National Debt Relief, http://www.nationaldebtrelief.com/, +1 888-703-4948, [email protected]
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