How to Use a Personal Loan for Debt Consolidation LUSO Federal Credit Union 2017-01-24 15:36:02 Important Information
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Did you know that the average American household has over $16,000 in credit card debt? The American Psychological Association reported that the number one cause of stress is money—more than work, personal life, or health issues. Debt consolidation personal loans can be a great help to people dealing with multiple credit card debt. By allowing clients to combine their debts into one new loan, clients are better able to manage the minimum monthly payments they owe, without getting overwhelmed about the multiple dues.

What Is a Personal Loan for Debt Consolidation?

If you have good credit, getting a personal loan from your local credit union, bank, or online lender is easy. Your personal loan rates are determined by how good your credit score is, so if your score is excellent, you can expect the lowest interest rates. If you don’t have a good credit score, there are special lenders that can help you. An important tip to remember is that debt consolidation is dependent on the person’s willingness and discipline to live within their means. Although the debt is consolidated, the total amount is not reduced.

How to Use a Personal Loan for Debt Consolidation

Debt consolidation pays off your debts for you, combines the values, and makes it easier to keep track of what you owe since it is now all in one account. These debts must still be repaid, hopefully with a better interest rate and monthly payment amount. Before applying for this personal loan, it is important to consider how much you can pay on it each month, and whether you are paying off secured or unsecured debt (credit cards, utility, rent, medical bills, etc.). Debt consolidation is not intended for secured debts such as mortgage or auto payments, which have collateral.

Why Should You Choose a Personal Loan?

The advantages of a personal loan for debt consolidation are simple. Consumers with large amounts of debt spread out over multiple credit cards have a lot on their plate. Trying to pay off each card monthly without the means to do so can result in added fees, higher interest rates, and other penalties. Choosing a personal loan can help you pay off all your cards and manage only one loan in their place. This results in fewer collection calls, the reduction of payments to one source per month, and the opportunity to improve your credit score gradually as you make payments on time.

Use LUSO Federal Credit Union for Debt Consolidation Needs

LUSO Federal Credit Union is a not-for-profit, member-owned financial cooperative dedicated to providing members with quality financial services and products. We at LUSO pride ourselves on serving the financial needs of our members and helping them manage their finances such as credit card debt. Our services and rates, which also include home equity loans, and mortgage loans, are available in Wilbraham, and Ludlow, Massachusetts. Contact us at our Ludlow branch at 1(844) 587-6328 or our Wilbraham branch at 1-(800) 808-5876 to learn more.

 

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