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Get Your Debts Consolidated Before The Holiday

Oct 15

Personal loans can be a great way to finance personal purchases or consolidate debt, but if you don't manage them responsibly, personal loans can get out of hand quickly. In this article I'll discuss personal loan consolidation and the pitfalls of paying off your personal loans before the holiday season.

        First things first - what is personal loan consolidation? Personal loan consolidation is when a borrower takes out a new personal loan with a longer repayment schedule and uses that money to pay off smaller existing personal loans. This reduces the total number of payments required for all of those existing personal loans while extending their repayment terms further into the future. Even better, most personal loan providers will waive some fees if you choose to consolidate multiple personal loans from one lender onto one personal loan from another lender.

        So personal loan consolidation sounds like a great idea and it can be, but there is a potential problem: personal loan providers generally charge an "introductory rate" on personal loans that last for the first X months (usually between 3 and 6). If you pay off your personal loan in this introductory period or before, you may end up paying thousands of dollars more than necessary in personal loan interest!             What if you need to pay off your personal loans before the holiday season? There are still options available. Depending on how much you owe, many personal loan providers offer borrowers temporary reductions in their personal loan payments when they take out new personal loans. This decreases your monthly payment and makes it easier to pay off your personal loans. This isn't exactly personal loan consolidation, but it can be a valuable tool when you need to get rid of your personal loans before the holiday season and before the introductory period ends.

        Now that we've covered personal loan consolidation and repayment options, what about personal loans themselves? Personal loans can be a great way to consolidate debt if managed responsibly. However, they're not always the best solution. Make sure you know how much personal loan interest rates will cost you before agreeing to any personal loan contract! You should also make sure that personal loans are actually your best option for debt consolidation - there may be lower-cost alternatives available through your  regular bank or credit union. And remember: stay on top of payments and keep personal loans under control! Personal loans can be a great way to reduce debt if you properly manage them. If personal loan interest rates are too high or personal loan repayment terms are unmanageable, personal loan consolidation might not be the best solution for your debt problems.

        If personal loan consolidation works for you, make sure you don't wait until the holiday season to consolidate your personal loans. Personal loan providers generally waive some of their fees if you combine multiple personal loans onto one new personal loan, so there is no reason not to do it before the holidays arrive. And remember: avoid taking out personal loans without carefully considering all of your options first! There may be better ways to consolidate debt at lower interest rates - it's critically important to do some research before taking out personal loans.