What is Debt Consolidation?
Does It Make Sense to Consolidate Your Credit?
If you’re mired in debt, you may perk up when you hear about a loan that promises to:
- Save your money by lumping your debts into one loan with a lower interest rate.
- Spare your payment hassles by providing the convenience of making one loan payment each month instead of multiple monthly payments to numerous creditors.
What will change?
You might consolidate your debts into one loan in various ways if you qualify. You could take out a home equity loan for the total amount you owe in credit cards and other consumer debt. You could put several credit card balances onto only one lower-rate card with a zero balance transfer fee. Alternatively, you could obtain a personal loan to cover the total debt amount.
Will your payment fit your budget?
You’ll replace lots of payments with one bigger payment. But be sure it fits into your budget. Consider, too, the total you’ll pay over the life of the loan. If you consolidate credit card debts into a 15-year home equity loan or unsecured loan, you’ll be stretching a five-year debt to 15 years. You could end up paying as much or more in total interest and principal.
Can you trust the lender?
Some lenders give loans to anybody just to make a buck. R1CU has your best interests at heart. We will work with you to find a loan that fits your budget. Our low rates and flexible terms make for affordable payments.
Want even more convenience? Arrange for automatic payments by requesting Loan Payment Transfer and Allocations form via secure message in online or mobile banking’s message center or call us at 1-214-319-3100. Talk to one of our loan officers or start a video banking appointment to discuss how to get your finances back on track. We will help you get a handle on high-rate debt.
