6 month consolidation loans have a clear purpose. They are short-term loans that allow borrowers to merge their debts into one. Thus, 6 month consolidation loans are a perfect product for those looking to consolidate their debts into one handy monthly payment. Take a look at what we can do on our site today.
Advantages of a consolidation loan
Consolidation loans involve research. You work out whether moving multiple debts into one single repayment saves you money. Research how you can reduce monthly payments. Research how you can lower your total repayment amount. A change of circumstances may help. If your monthly income rises, you can increase repayments and thus reduce the repayment period. 6 month consolidation loans, as an example, allows you to combine multiple existing debts into one manageable monthly payment (instead of lots of smaller bills). It reduces the amount you pay each month. Some of these loans however involve repaying over a longer period, meaning that you’ll pay more interest over all.
Other considerations
Debt consolidation may also be an option to reduce the interest rate you pay or to give you a final date when you know all your debts will be repaid. If you are considering a debt consolidation loan because you are struggling to meet your current debt repayments, another solution could be more suitable. Moolr advise you speak to a debt expert about your situation and they’ll be able to advise on your individual circumstances. A debt consolidation loan allows you to use new credit to pay off existing credit. If you are currently paying a number of lenders each month, you could take out a debt consolidation loan. Then you pay off your existing debt with it, and then make just one manageable payment per month towards the new loan.
Pros and cons
Debt consolidation loans can be useful in some situations, but can include extra costs. This is why it’s best to make sure you understand the true cost of any loan or speak to an expert about your individual circumstances to make sure it’s the right option for you. When taking out a consolidation loan, you need to be sure that you can realistically afford to make the new payments. Otherwise it won’t help you. This is a vital consideration if you’re looking at a loan that’s secured against your property. If you do not keep up the repayments, it could be repossessed and you could lose your home.
If your credit rating is poor, you may not be eligible to take out a loan. Alternatively, you may be offered one with a higher interest rate. This means you could end up paying significantly more overall.
You may also be tempted not to include debts with a lower interest rate than the debt consolidation loan. However, the idea of a debt consolidation loan is to simplify and help you to manage your payments each month. Therefore, by not including these debts, you may not actually be helping your situation. The loan may become unaffordable if you still have other lenders to pay. It’s also good to be aware of any early repayments charges too, which you’ll sometimes have to pay if you want to repay some forms of credit back before the end of its original term.
If you are considering a loan today, take our no obligation quote, and see what Moolr can do for you right now.