Resolution time: Personal or consolidation loan? We unpack, you decide!
If you’re having difficulty repaying several loans, you should consider a consolidation loan. This is taking multiple outstanding debts and consolidating them into a single, more manageable loan. In other words, you’ll take out one new loan and use that loan to pay off all your other debts.
Now where a personal loan could be compared to a consolidation loan is because most personal loans are taken to consolidate debt too such as credit card debts. Although the difference with a personal loan is that it allows you to remain in control of your debt. Receive immediate access to funding. This allows you to get rid of your debt much faster whilst also receiving a lower interest rate than you have on your existing debt. But this is provided if you can reduce your monthly payments as well.
Whereas with a Consolidation loan it’s a perfect fit if you don’t want to deal with many creditors, but rather deal with one company responsible for the many debts combined into one. As the company responsible for your debt consolidation usually has a large experience or even contacts to settle the debt on your behalf.
Plus another benefit with a Consolidation loan is that you’ll get a lower interest rate and lower monthly payments. This will help to stabilise finance and get back on your feet. While other benefits to a personal loan are the minimum of documentation required to get approved by a lender, and the flexibility of use as personal loans are multipurpose. Consider an unsecured personal loan to have your assets protected.