If you find yourself in a financial situation where you have a lot of debt from credit cards, medical expenses, or other loans with a less than stellar interest rate, it may be difficult to keep up with the monthly payments and feel like you're wasting your hard-earned money.
Debt consolidation can help you get back on track by reducing high interest rates, lowering your monthly payments, and even shortening the length of time you're in debt. Although there are several types of consolidation loans available, one of the most popular is a Personal Loan.
A Personal Loan Is A Great Option for Debt Consolidation
It’s no wonder that a Personal Loan is a popular choice for debt consolidation because they offer flexible and fixed repayment options that allow you to customize your repayment schedule. A Personal Loan for debt consolidation is typically an unsecured loan that is low risk for borrowers and has more advantages than higher rate credit cards. Choose a Personal Loan from a trusted lender like Peach State that offers competitive rates, low fees, and flexible repayment terms to make the most out of your debt consolidation options.
5 Essential Steps to Find the Best Personal Loan for Debt Consolidation
1. Calculate Your Total Debt
The first step to finding the best personal loan for debt consolidation is to calculate the amount of money you owe to creditors. Use this debt consolidation calculator to tally up all your debts and begin the search for the best debt consolidation option that fits your needs.
2. Research Lender Options
Once you decide a personal debt consolidation loan is right for you, it’s time to do your research to find the best lender options. Having a trusted lender you know you can count on is key to finding the best Personal Loan for your debt consolidation needs. Since many lenders offer Personal Loans, it is important to do your research in exploring financial institutions for a reputable lender to work with.
Reveal tips to get out of debt fast while exposing unrealistic expectations by downloading our guide:
3. Get Prequalified for More Than One Personal Loan
It’s always a good idea to have a backup plan by getting prequalified with multiple lenders for your debt consolidation loan needs. Remember that being prequalified doesn't mean that you'll definitely get approved, but it will provide you with loan options in determining which one will work best for your unique situation.
4. Decide on the Best Personal Loan Option
Researching the average rates and fees of a Personal Loan will help you get a better idea of the best and lowest cost options to fit your needs. The best loans will save you money on your current debt by lowering your monthly payment, reducing the total interest you would pay over the life of the loan, or saving you additional monthly payments by shortening the length of the loan. Be sure to also compare other fees that may come along with the application process to help you find the best loan available.
5. Apply for Your Personal Loan
Once you have found the best personal loan for your debt consolidation, have applied, and have been approved, don't stop here! Continue your journey to becoming debt free with these final three steps.
6. Pay Off Your Debts with Your Personal Loan Money
When you secure your loan, the lender will send the money directly to you so that you can pay off your debt. Often the money is directly deposited into your bank account. Be sure to spend the funds for the exact purpose of the loan: debt consolidation. While it may be tempting, do not spend the money from your personal loan to make new purchases. In fact, it's a good idea to pay off the debt as soon as possible after getting the loan to avoid additional interest on the debt.
Bonus Steps to Help You Become (and Stay) Debt Free
Now that you're on the road to financial freedom, it's imperative that you make smart choices when it comes to spending and debt. Good habits that include a commitment to a budget, controlled spending, and a payment plan will provide a bright financial future.
7. Maintain Good Spending Habits
Keeping your expenses as low as possible is a great way to control spending and avoid taking on new debts. Start by making a list of all your expenses and creating a budget for the things that you spend money on each month like subscriptions, groceries, gas, rent, and ordering takeout. Tracking your spending will help you determine if an item is a necessity or indulgence so you can find ways to cut back on spending. Save any extra money you have left over in an emergency fund or use it to pay down other debts.
8. Payoff Credit Cards Immediately
Avoid making impulse buys or running up a big credit card balance. While using a credit card makes some things easier and is sometimes necessary in emergency situations, charging unnecessary purchases isn’t the best method for staying debt free. If you have to use your credit card, it's best to make it a strict rule to pay it off each month. By doing so, you'll save money by not paying interest, improve your credit score, and gain better control of managing your money.
Peach State Can Help With Your Debt Consolidation Goals
If you're planning to consolidate your debt to save money, reduce the length of your loan repayments, or simplify your monthly bills, Peach State is here to help.
Get started on your debt consolidation journey by applying for a Personal Loan, or gather more information on our other debt consolidation solutions such as our Home Equity Loans, or Low Rate Credit Cards. Contact a Peach State Lending Specialist today!
For more tips on using a personal loan for debt consolidation, review our Debt Consolidation: Expectations vs Reality Guide.
