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So, what’s debt consolidation? It’s the process of taking out a new loan to pay off existing debts. Some of the benefits of include:
That said, there are also some risks:
So, if you’re considering debt consolidation, it is important to weigh the benefits and risks carefully. You should also compare interest rates and fees from different lenders before you choose a loan.
Here are a few steps to guide you if you choose to go down the debt consolidation route:
Bottom line: Debt consolidation can be a helpful tool for managing debt, but it is not a magic bullet. It is important to use debt consolidation responsibly and to make a plan to repay the loan as quickly as possible.
• Debt consolidation is a process in which you work with a third-party company to negotiate with your creditors to lower your interest rates or monthly payments. The third-party company will typically charge you a fee for their services, and they may also require you to make a monthly payment to them. But beware, this is often much pricier than a debt consolidation loan and often hurts your credit score as it involves settling your debts.
• Debt consolidation loans are a type of personal loan that you can use to pay off your existing debts. You will receive a lump sum of money from the lender, which you will then use to pay off your credit cards, medical bills, or other debts. Once you have paid off your existing debts, you will only have one monthly payment to make to the lender.
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