Consolidating loans tips and tricks

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Remember, your debt is an emergency, and like an emergency, you want it over with as soon as possible.The promise of a lower monthly payment can be seductive if you are struggling with debt, but the reason the monthly payment is reduced is that the life of the loan is increased.Debt consolidation seems like it would be a useful facet of that plan.But is it or will consolidate your debt cost you more in the long run?

You transfer the balance from your current high-interest credit cards to the new card.Rather than making multiple payments to multiple creditors, you just make a single payment to the company holding the new loan.Credit card debt is a prime example of the kind of debt you want to consolidate because it has a high rate of interest.For private student loans, it’s higher, between 7.81%-9.66%.Even if your interest rate is manageable, your monthly payments may not be so you might consider consolidating your loans to lower that monthly payment. Twenty percent of Americans have one or more medical debt on their credit reports, and more than half of collection items on credit reports are for medical debt.

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