Many people have been told that a debt consolidation loan is the worst thing that they can do because it affects their credit score.
While there is some truth to the credit score thing, it is nowhere near as much damage as continuing to make late payment after late payment.
Even if you are making your payments on time, if your debt to income ratio does not look all that good, your credit score is being affected.
All it would take is one unexpected expense to come up and you would be in trouble.
Another thing to consider is that future lenders do not look just at the credit score as they also look at your individual debts and what they are. For example, unpaid medical bills really do not affect you as unpaid credit cards do.
If a lender looks at your credit report and notices that you took on a debt consolidation loan, they will view it more as you did a responsible thing rather than thinking that you are not a good applicant.
In the end, all of the lenders got paid so it is not like anyone was left out of their money. This is something that they will think about.
So how do you know whether or not you should take on a debt consolidation loan? The best thing to do would be to look at your expenses. Look just not at your monthly bills but the whole picture.
Take a look at how much you are actually reducing your debt each month when you make your payments. Are you really making all that much of a dent in your debt? If not then you are simply making monthly payments to a company in order to continue to be allowed to owe them money. This is not a good thing.
In addition, can you afford the little extras in life that make the days just a little more enjoyable? Can you afford to rent a movie, order pizza on a Friday night or simply spend a little extra gasoline money to take a drive through the countryside?
If not, then you are over extended and you really should look into your loan consolidation options. When you take out a loan for the consolidation of your bills, you will be surprised at how much extra money you will have each month.
Just think of all of the wonderful things you can accomplish with the extra money each month. Many people have found that they have anywhere from one hundred to eight hundred extra dollars each month.
This is a lot of money that can be placed back on your debt to wipe it out faster or you can put all of the extra money into a savings account. Then again, maybe you can finally take your family on a dream vacation.
So step back and take an objective look at your finances. Would you advise someone else in the same situation to take out a debt consolidation loan? If so, then what are you waiting for?
For more information on debt consolidation or for a debt consolidation loan don't hesitate to contact us
