I’ll also explain what debt consolidation is, different types of debt consolidation loans, where to get debt consolidation loans, alternatives to debt consolidation, and how to avoid scams.
This means you can arrange much lower monthly payments than with another type of loan.
You can see if your bank or credit union is able to provide you with a debt consolidation loan.
Banks and credit unions are typically only willing to lend people around 10% of their net worth (your assets minus your debts) on an unsecured basis.
In general, debt consolidation loans can reduce the amount of interest you pay each month, reduce the number of creditors you have to deal with, and shorten the amount of time it will take to pay off your debts as long as you qualify and keep with the program terms.
If you’re struggling to pay high interest rates on a lot of unsecured debt, consolidation may seem like an attractive solution.