Loans come in handy when you have a pending issue that needs to be resolved sooner rather than later. Some of these issues could include paying rent, school fees, medical bills or even repairing your car. In fact, most people use their credit cards to apply for such loans. The problem is that the majority end up being overwhelmed by the said loans due to the interest rate. When you are in such a dilemma, you can only hope that one day you will hit the jackpot at the casino and clear all the debts. But that’s just wishful thinking. Unpaid loans will only continue to increase your frustrations as time goes by. Debt Consolidation Plan Singapore is a magic bullet that was invented to rescue people from the burden of paying multiple loans. Basically, debt consolidation allows you to get a huge loan from a lender so that you can settle the small loans and remain with one. But most people imagine that consolidation of loans makes the debt bigger. Let’s now look at the benefits of consolidating debt.
Avoid Annoying Calls
Lenders usually use a friendly tone when they are lending you their money. But when you fail to honor your promise due to unavoidable situations such being laid off by your employer, they will not want to hear your excuses. In fact, they immediately hand over your case to a debt collection agency and that’s where trouble starts. The debt collection agency will immediately start calling your number endlessly as they push you to clear the debt. Now imagine such calls from like five or ten agencies. The experience can be very annoying especially when the calls come when you are in the middle of an important conversation or a meeting.
Avoid Stress
Having multiple loans can earn you sleepless nights. This is because you will keep thinking about how you can sort each debt. And since the loans have different terms, you will start prioritizing the loans depending on the stubbornness of the creditor. The resulting stress can cause your productivity in your workplace to dwindle. There are actually some people that drink themselves silly as they try to avoid the burden of paying multiple loans. The worst is that the stress can trigger certain conditions such as high blood pressure and diabetes. Debt consolidation therefore guarantees peace of mind because you will only be dealing with one entity.
Single Payment
When you have multiple loans, you have to make several payments every month to avoid rubbing your creditors the wrong way. But since you still have other bills to pay, the situation causes you to default in meeting the creditor’s demands. In fact, having many loans tends to slow down your speed of clearing debts. But when you have a single loan to pay, you can clear it much faster by making sacrifices here and there for the sake of reducing your daily expenses.
The other advantage is that it gives you access to reduced interest rate. As mentioned earlier in the article, most people default due to an increase in interest rate. The rate may sound small when it’s just one loan, but when many lenders are involved, the amount that you have to part way with can really go through the roof. In addition to that, debt consolidation helps in improving your credit score status. Keep in mind that creditors can’t lend you money when you have been blacklisted by several credit card companies. But they can be lenient when they see that you only have one pending debt and you are already making monthly payments.
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