Loan Consolidation

Loan consolidations are used most often to reduce interest rates and lower monthly payments or to simply get out of debt and save thousands of dollars while doing so. If credit card bills, medical bills, student loans or unsecured personal loans have a person overwhelmed and/or are unable to keep up with the payments, loan consolidation may be the answer.

A person might first determine whether or not they should consolidate. The interest rate is based on the weighted average interest rate on the loans being consolidated. One of the benefits of a loan consolidation is that the rate is fixed for the loan consolidation term and it cannot exceed 8.25 percent. The drawback of the fixed rate is similar to a fixed home mortgage loan in that the longer payments are extended, the more a person ends up paying. Other benefits to having one lender that offers one payment and flexible repayment options is a person can receive an additional 0.25% interest rate reduction by enrolling to have payments automatically withdrawn from a checking or saving account. This is done through Electronic Debit Accounting (EDA) and also affords the ease of not having to remember to make the payments every month.

This type of financing gives an added benefit to those who are behind in their payments or not making payments at all. Programs are designed specifically for this and they will work with that person to establish a manageable budget. Loan consolidations are heaven sent answers to those who are struggling with too many lenders and an overwhelming monthly debt. Being able to lower the interest rate and reduce the amount of payments with loan consolidation made each month can provide a much needed relief for many. Psalm 62:1-2 says "Truly my soul waiteth upon God: from him cometh my salvation. He only is my rock and my salvation; he is my defence; I shall not be greatly moved." God has such wise things to say about money and knows this is a great earthly struggle. Pray for His guidance in any particular situation.

Consolidation for student loans is very popular and offer special services. Repayment of student loans with loan consolidations offers contingent repayment plans where a person can switch repayment plans according to specific needs and circumstances. If that person is still in school, they may have the added benefit of a 6 month grace period. School loans have eligibility requirements depending on whether or not the person is still in school, out of school and whether or not they are already in default. Overall, loan consolidations are readily available and can be specially designed to meet individual needs. Consolidating debts can be the factor that makes life itself a little bit easier to deal with and can do wonders for any monthly budget.

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