06 Mar Best Loan Options for the Financially Struggling
If you’re under financial stress, getting a loan might be a sustainable option to consider. However, there are certain types of loans designed to do the financially struggling good, and others that are designed to trap them. This article discusses the best loans for the financially struggling, as well as the best ways to properly implement them. Read on for everything you should know about loans when you’re financially struggling.
Your best bet? A consolidation loan
A consolidation loan is a loan designed to pay off your existing debt so that you make one easy monthly payment with a fixed interest rate, typically lower than your previous debt. It simplifies debt payment into a single monthly payment. This way, you can mitigate forgetting payments. You’ll save money in the long run, allowing you to allocate funds to what’s important to you.
They might also offer a lower interest rate than that high-rate revolving credit you have. Save money on interest charges in the long run. Also, by extending your loan term, consolidation loans can lower your monthly repayment. This is especially helpful if you’re struggling to make your minimum payments, giving you some breathing room in your budget.
Things to consider
Consolidation loans don’t eliminate debt, they just help you better manage it. You still have to have financial discipline and make your monthly payments, which you can automate so you don’t forget them.
Regarding interest rates– if you have poor credit, a lower interest rate might be more difficult to obtain. You can still negotiate with creditors, however, to explain your situation.
Other loan options
Other loan options might have higher interest rates, but they are still attainable. It’s worth exploring all possible financial avenues so you can find what best works for you. Remember, taking on new debt when you’re already in the deep end is risky. If you’ve exhausted all other options, like government assistance programs or attaining alternative income (a second job, perhaps?), a loan might be your only way out.
You could consider Debt Review, which also consolidates your payments into one monthly payment. It’s different from a consolidation loan in that you don’t take out a loan to pay off your debt, you restructure your debt and negotiate with creditors for reduced amounts, or at least reduced interest. Our legal professionals and debt counsellors can help you with this.
There you have it! The best thing to do if you have your heart set on taking out a loan is to think about debt refinance for the reduced interest rate. Alternatively, think about Debt Review, the best way to restructure your debt into one monthly repayment.
Go ahead and contact us if you have any questions regarding consolidation loans or Debt Review. We’re here to help!