• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

National Debt Relief

National Debt Relief - A+ BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

Talk to a debt counselor toll free:

800-300-9550

Get Relief From Credit Card Debt

Medical Bills and Unsecured Loans

  • Apply Now
    • Qualifications
    • Is This Right For Me?
  • Proven Results
    • Debt Relief Benefits
    • Credit Card Debt Relief
  • Debt Relief
  • Credit Card Debt Relief
  • Debt Consolidation
  • Login
HomeBlog Debt ConsolidationHow To Make Debt Consolidation Loan Effective
Video Transcript

Free Debt Consolidation Quote

By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
  • National Debt Relief, LLC BBB Business Review
  • McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams

How To Make Debt Consolidation Loan Effective

July 17, 2013 by National Debt Relief

How To Make Debt Consolidation Loan EffectiveDebt consolidation loan is probably one of the most controversial among the other debt solutions. The reason for this is it is what most borrowers think of first as a DIY debt relief program but financial experts will not encourage you to do it. Using a debt to cover another debt just seems ridiculous and illogical somehow.

But if you analyze it carefully, there are benefits to it and the structured single payment scheme is more appealing than having to deal with confusing multiple debts. You get to enjoy the following:

  • lower monthly contribution

  • longer payment period

  • lower interest rate

  • easier single payment plan

  • paying off the debt while increasing credit ratings

What makes debt consolidation fail?

Although these benefits are usually guaranteed in debt consolidation loan, there are people who fail at this program. There are a couple of reasons why this program can fail a consumer. If you are sure that this is what you want to get out of debt using this method, you need to avoid them.

Here are three of the most popular reasons why you can fail at debt consolidation loan:

If you do not have the right qualifications for it.

There are a couple of qualifications that you need to possess in order for you to enjoy the maximum benefits of debt consolidation loan.

  • Good credit score. To guarantee a low interest on your loan, you need to have a high credit score so that you can be viewed as a low risk borrowers. In most cases, people with bad credit scores are given a high interest because they have the highest chance of defaulting on their payments.

  • Collateral. If you do not have a good credit rating, another way to get a low interest is by having a collateral to put up for a secured loan. The lender is guaranteed that in case you default on your payments, they can fall back on your collateral as payment. They do not need to protect themselves by giving you a high interest because that makes you a low risk borrower.

  • Stable income. There is no debt reduction here so you need to be able to afford paying off the complete balance that you owe. Even if you used the loan to pay off the other debts that you owe, you should remember that you still owe the same amount of money.

If you have the wrong expectations.

As mentioned, there is no debt reduction. Some people make the mistake of thinking that their debts are paid off and solved. That is not true. You only used the loan to pay off your high interest debts. You still have the same debt amount – you just shifted it so you only owe one lender.

Also, some people get frustrated by the slow progress of debt payments. You should expect that because you have lowered your debt contributions every month.

If you do not correct the mistakes that got you in debt.

Another reason to fail at debt consolidation loan is when you fail to correct the mistakes that you made in the past. It can be bad spending habits like overspending. You need to identify what got you in debt in the first place so you can correct and avoid making the same mistake from now on.

It can also be a lack of emergency fund that got you into this mess. The great thing about this debt relief program is the lower monthly payments will free up some of your funds so you can put it in your savings. Growing your emergency fund will help you eliminate the need to borrow money.

Tips to make debt consolidation loan successful

There are many techniques to make debt consolidation loan successful. You need to follow as many of them as it applies to your unique financial situation. Here are a couple of tips that you can implement.

  • Do the math. Make sure you are really saving money if you go through this program. Use online calculators from Money.com or Bankrate to help you calculate if you are really better off with a debt consolidation loan.

  • Create a payment plan and follow it strictly. Some people make the mistake of using their loan for something else. Make sure you really pay off what you intended. Not only that, commit to paying this new loan diligently.

  • Remove the credit card temptation. This is one of the culprits in making debt consolidation loan fail. You have to stop acquiring debt by removing the temptation that credit card have. Now that your have paid them off with the loan, they would have gone back to the zero balance. That is very tempting to use. Do not give in and keep the cards somewhere you cannot access it easily.

  • Set financial goals. It helps if you provide yourself with goals that will motivate you to make your monthly payments. That will keep you from defaulting on your obligations and getting yourself into more trouble.

Do you qualify for debt consolidation?

National Debt Relief
National Debt Relief

National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

Follow National Debt Relief: Facebook Twitter Instagram Linkedin

Primary Sidebar

Consolidate Your Debt!
Find out how NDR could help.
  • Get one low monthly payment
  • Avoid bankruptcy
  • Get out of debt in 24-48 months
Get Your Free evaluation
Free Debt Consolidation Quote
By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
 Trusted By Our Clients

"Great Success"

Finding National Debt Relief has been an absolute dream.. The amazing reviews you see everywhere are valid. Every time I call with a question, the team assists me in a kind and professional manner. NDR is helping me tackle my debt - we are chipping away at a new goal every month. I am so thankful to have found NDR.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Jessica Pauciello
ConsumerAffairs Reviews

Latest Debt Consolidation Posts

  • Is A Debt Consolidation Loan Right For Me?
  • Step-by-Step Guide To Consolidating Debt
  • Debt Consolidation Loans For Bad Credit – A Good Idea?
  • Is A Home Equity Loan A Good Idea For Debt Consolidation?
  • 3 Hard Questions To Ask Your Debt Consolidation Company
National Debt Relief, LLC BBB Business Review AFCC Top Ten Reviews Gold Top Consumer Reviews Consumers Advocate Trust Pilot
Company
  • About Us
  • Contact Us
  • Blog
  • Careers
  • Corporate
  • Privacy Policies
  • Terms Of Site
  • Disclaimer
  • Sitemap
Products
  • Debt Relief
  • Credit Card Debt Relief
  • Debt Consolidation
  • Debt Settlement
  • Calculators
  • FAQs
Debt Resources
  • Credit Card Debt
  • Medical Debt
  • Personal Loan Debt
  • Unemployment
  • Divorce Debt
  • Retiree Debt
  • Veteran Debt
  • Business Debt
  • Personal Finance
Follow Us
  • Facebook
  • Twitter
  • Linkedin
  • Instagram
  • Pinterest

© 2021, National Debt Relief, All Rights Reserved.

Disclaimer
Disclaimer
Disclaimer