About Debt Suitable For
Consolidation
Payday Loans and Cash Advances as well as
Direct Deposit Loans are great candidates for debt
consolidation due the fees associated with such types of
cash loans. Not all debt is suitable for
consolidation. In order to get any advantage from debt
consolidation your outstanding debt must have a higher
interest rate than the rate of the new loan. Thus, by
consolidating you are reducing the amount of money you spend
on interests every year. If the repayment schedule is
similar or shorter, then you would be saving money in the
long run too.
Pay day loans, cash advance loans, unsecured loans, credit
cards, store cards, etc. are the kind of debt that is
suitable for consolidation. These financial products carry
high interest rates. Credit cards can charge up to 20% or
more and the rates charged for pay day loans and cash
advance loans can reach huge heights.
But home loans, home equity loans, subsidizes business and
student loans, government loans and such unlike payday
loans, cash advance, paycheck advance or other types of
online loans are not suitable
for debt consolidation due to the fact that they carry low
rates. The only reason why anyone would want to consolidate
for a higher rate is to obtain lower and affordable monthly
payments by extending the loan repayment program. |