A debt consolidation loan is a new loan issued from one creditor to pay off a number of loans from a number of creditors.
Typically, a debt consolidation loan can turn an unmanageable debt load into one where the payments are spread out over a longer time period with lower interest rates, making them more manageable.
Benefits of a debt consolidation loan
Benefits of a debt consolidation loan are:
- The convenience of paying only one creditor.
- A lower monthly bill.
- To shop for a lower interest rate and more favorable terms.
- An alternative to bankruptcy.
- To possibly save your credit.
There are many sources for debt consolidation loans so spend some time and do some comparison shopping.