You don't have to deal with debt on your own
Debt can be a scary thing to fall into and a hard situation to get out of on your own. If you have multiple loans, are carrying credit card or store card balances, or are struggling to pay bills, you do not have to get through it alone. A good first step is talking to a lender at your financial institution. We can help you identify financial goals, review your budget, and help get you on track to achieving those goals.One common way financial institutions, including Access Credit Union, help people pay off debt is with a debt consolidation loan. This is a type of personal loan that combines any debts you have (car loan, student loan, credit card balances, overdue bills, etc.) into one loan
Why would you want to bring all your debts together? These are a few benefits of a consolidation loan:
- A single structured payment
- Save on interest costs
- Improve your credit score
- Pay off debts sooner so that you can build your net worth
- Free up cash flow
- Reduce stress
Having one loan to pay off simplifies your finances and gives you more financial stability and felxibility. If you’re approved for the loan, you will only have to keep track of one set payment, which you’d pay off over a fixed term.
If your consolidation loan includes a credit card balance or any high-interest debt, you usually will benefit from a lower interest rate, which will help you pay off what you owe faster. Plus, with the fixed payment, you can’t be tempted to make a minimum payment as you would with a credit card. Paying off only the minimum payment amount will increase the amount of interest you spend and the time it takes to pay off your debt.
Interest costs increase the longer you hold the debt. With debt consolidation loans, it’s important to watch out for loans with a long repayment period. Though these may give you a lower monthly payment, the extended repayment time means you’re paying more interest over the life of the loan.
If you’re struggling with debt and looking for some support, please reach out to Access Credit Union to explore your options.