Does it feel like you’re always making monthly payments? Depending on where you are in life, you may have a variety of loans and bills, including student loans, auto loans, or credit card debt. Each loan has a separate payment date and interest rate, and it can sometimes be hard to keep track of your finances.
One way to potentially alleviate some of this stress and simplify your finances is by consolidating debt with a personal loan. You can use a personal loan to repay your existing loans and bills, potentially bringing all of your outstanding debt together, depending on the amount you are approved for. This means you may be able to make only one monthly payment instead of several. You may also have the advantage of paying a lower interest rate on the consolidated loan than you were paying on the individual loans and bills, particularly if you have a better credit score than you did when you took out the loans originally.
When to Consider a Personal Loan to Consolidate Credit
Before deciding to use a personal loan to consolidate debt, there are a few things to consider. To determine if debt consolidation is right for you, you should compare the terms and conditions of your current loans and other debts with the loan you’re considering to see how much more or less you may be paying in the long run. Additionally, make sure you understand all of the terms of your existing loans, as some federal student loans offer protections that you may give up by consolidating.
Consolidating Debt with a Personal Loan vs. a Credit Card
There are several ways you can consolidate debt besides a personal loan. One common way to consolidate debt is to use a balance transfer credit card. You move all of your debt to one credit card to simplify your payments, and most balance transfer credit cards offer a low starting APR.
However, the low introductory APR offered for balance transfers on a credit card eventually expires, so if you are unable to pay off the debt before the expiration date you could be subject to a much higher APR. Another factor to consider is that many credit cards charge a fee upfront to transfer your balance.
With a Santander Bank Personal Loan, there are no application fees, no closing costs and no annual fees. Santander Bank offers competitive rates on personal loans, and will also provide a rate discount if you set up automatic payments from any Santander Bank checking account. Additionally, you won’t have to worry about rates changing over time, causing your payments to increase, as a Personal Loan offers a fixed interest rate for the term of your loan.
Debt Consolidation as Part of a Larger Repayment Plan
Consolidation is not debt elimination, rather it’s a way of simplifying your payments and potentially lowering the cost of interest you’re paying over time. Debt consolidation could be a part of your larger plan to repay your loans.
Ready to take the next step and consolidate your debt? Learn more about Personal Loans from Santander Bank, and use our calculator to help determine if debt consolidation is right for you.