Personal loans are taken out for a variety of different reasons. They are generally used for a specific purpose by the recipient, for example, to head off on a holiday, to renovate a home, or even to purchase a car. Given that you can take out personal loans for such a wide variety of reasons, you may find yourself with a number of personal loans to your name.
This can result in confusion, making it hard to pay back each loan at the right time each month. Additionally, it can also lead to further debt in the process as it is so hard to manage. This is why people often choose to consolidate their personal loans into one single loan. It has many benefits and can help you get ahead financially. Here is how to consolidate personal loans.
Types Of Personal Loans
While personal loans aren’t nearly as flexible as credit cards, they do carry a much lower interest rate, which makes them a great option when you need the cash. When you apply for a personal loan, a lender will check your credit score and use this number to determine whether or not you are worth taking a risk on.
If you have a good credit history and meet all your repayments on time with no defaults, then you will find it easy to take out a personal loan. In fact, you may even find yourself taking out two or three of them over the years to fund different things. Here are the different types of personal loans you can choose from:
- Variable personal loan: the interest rate of this loan is subject to change depending on the market. This means your repayments will also change.
- Fixed personal loan: this is when your personal loan interest rate is fixed for the duration of the loan.
- Secured personal loan: when taking out a personal loan, you are often given the choice of whether you would lie to secure it against an asset, such as a car. This has the added benefit of securing you a lower interest rate.
- Unsecured personal loan: these loans don’t require you to secure with an asset. It means the lender is taking on most of the risk and often comes with a higher interest rate.
No matter which loan you opt for, if you take out a few different personal loans it can get confusing. While you may still have the means to meet the repayments, it can be tricky to manage them. This can lead to missed payments and can bring down your credit score. One great solution is to learn how to consolidate personal loans.
How To Consolidate Personal Loans
What exactly does it mean to consolidate your personal loans? If you’re wondering how to consolidate personal loans, the process itself is quite easy. It is the process of combining all your debts into one single debt. There are many benefits that come with doing this:
- Much easier to manage: by having all your debts brought into the one loan, things are much easier to manage. You only have to make one monthly repayment and keep track of one loan, taking the pressure off and making it more manageable.
- Reduced stress: with your payments much easier to manage, you will also find that your stress is reduced as a result. You have less to think about and worry over.
- Cheaper: consolidating your loans also presents an opportunity to secure a lower interest rate. This means you could end up paying less overall than if you had left the loans separate. You can also save on fees and charges that come with each loan. There are even tools to help you estimate how much you can save.
- Boost your credit score: staying on top of your finances is key when it comes to boosting your credit score. Being able to consolidate your debts into one easy repayment will make this task much simpler.
How To Consolidate Personal Loans With Debt Consolidation
Wondering how to consolidate personal loans with Debt Consolidation Australia? The process is easy! A debt consolidation loan works by combining your debts into one simple payment. Our team of loan specialists have helped thousands of people get in control of their finances. There are four quick steps involved:
- Enquire online: we have a quick and easy form you can fill out in seconds.
- Talk to our experts: our expert team will contact you straight away to talk about your individual circumstances.
- Upload your documents: once we determine your needs, we will ask you to upload the necessary paperwork online using our secure platform.
- Consolidate: we will send through a proposal to get you out of debt and to help you get on top of your finances.