An Easy Guide To Debt Relief Loans

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debt relief loans

When you’re struggling with multiple debts, your payments become complicated. Which credit card do you pay back? How do you split up payments? Debt relief loans were set up as an alternative to having to deal with those questions.

When you have multiple debts to pay off, interest can become hard to track. Making payments becomes more stressful, and often more costly. This is why it usually makes sense to roll all those little pesky debts together.

So, let’s go over how debt relief loans work and when you should consider one.

What Are Debt Relief Loans?

Debt relief loans are personal loans meant solely to pay off your other debts. You can take them when you are struggling with too many individual debts of any kind.

People often take these loans to pay off their credit card debts. But they can also be taken to relieve yourself of other debts such as:

  • Mortgage debts
  • Car loan debts
  • Any other personal loan debts

Benefits Of Debt Relief Loans

When you take a debt relief loan, you pay off all the debts you need to cover right away. You are given a fixed rate when you take your loan. That fixed rate often leads to your loan repayment costs falling significantly. More importantly, these loans offer you more time to pay off your debt. This can ease the financing burden you’re facing now.

Debt relief loans can also save and improve your personal credit score. Falling behind on multiple credit card payments will start to chip away at your credit score. But when you take the loan and pay your other debts off all at once, you may even see your credit score rise immediately.

The ultimate and most important benefit to these loans is, of course, the potentially stabilizing effect they can have on your personal finances. Having one larger debt to pay off at a better interest rate is better than paying off many small but proportionately expensive loans.

When To Consider Debt Relief Loans

Debt relief loans only make sense when you’re struggling with more than a couple of debts. The more individual debts you’re struggling with, the more sense they make.

When the debts you’re struggling with are from credit cards, debt relief loans make even more sense. That’s because credit card interest rates are typically much higher than rates charged for other credit options. Instead of paying 5 19.99% interest credit card debts, wouldn’t it make more sense to pay one 17% interest loan?

Debt relief loans are seldom a bad option when you have multiple debts you can’t keep up with.

What Are The Downsides Of Debt Relief Loans?

These loans can be hard to get. If you don’t have a good credit score, many lenders will be hesitant to help you. They may see you as a risky borrower if you’re both struggling with debt and have an imperfect credit history.

Debt relief lenders may also charge extra fees that increase their overall cost. These fees can sometimes negate the benefits of getting a debt relief loan. That’s especially true if the loan’s interest rate isn’t much better than the average interest rate you were paying before.

Lastly, there may be a psychological downside to a debt relief loan. While it can feel good to clear multiple pesky debts and have one left to deal with, feelings can be deceiving. Paying them off can be about as difficult as paying off a credit card debt. 

Where Can I Get One?

You can get debt relief loans from many of the same places where you get other personal loans from. Many personal lenders and lending marketplaces will offer them. There are also specialized companies that provide them.

Even Financial

Even Financial offers debt relief loans, as well as several other loan products. They are a personal loan marketplace, so they’ll have many potential lenders to match you with.

When you look for a debt relief loan on Even Financial, they’ll ask you for some basic financial information. They will then use that information to match you with available lenders that you qualify for. They will do most of the homework in searching for the best loan for you. You just need to make the final decision by sending an application.

Personal Installment Loans

You can use many kinds of loans to pay off other loans. The most common way to consolidate debts is to simply take out a personal loan. Most lenders will see debt relief as an acceptable reason to take out a personal loan. 

Just be aware that it’ll be hard to get decent rates if you don’t have a good, reliable income and a good credit score.

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