Is Debt Consolidation Right for You?

Debt consolidation can be a powerful tool to regain control of your finances when credit cards or other debts become overwhelming and unmanageable. In these circumstances, it can make sense to take out a new, more affordable loan or line of credit in order to pay off expensive debts. However, there are some key considerations to bear in mind before determining if debt consolidation is right for you.

The first thing to consider is the cost. If you can secure a new form of credit with a lower interest rate than your existing debts, you could save a substantial amount of money in interest payments. However, it is essential to make sure you can get a rate that is more affordable than the rates you are currently paying. A large, expensive loan could help you wipe out your credit card balances, but it will cost you in the long run if you don’t reduce your interest.

The next thing to consider is whether or not this will simplify your finances. The objective of debt consolidation is to streamline the management of your finances, not to complicate it. Ideally, a single debt consolidation loan can enable you to repay multiple lines of existing debt—thus consolidating all of your debt into one easily manageable repayment process.

Finally, debt consolidation should be intended as a long-term solution. When used appropriately, a debt consolidation loan can be an effective way to regain control of your personal finances. However, debt consolidation must not be viewed as a get out of jail free card that will allow you to resume reckless expenditure. All circumstances are unique, but if a large amount of debt has been accrued in the past, it may be necessary to re-evaluate your budgeting and spending habits in order to create lasting change.

VIVA Finance provides a much-needed debt consolidation option for low-credit borrowers by offering personal loans with rates that are based on employment—instead of credit score. This enables individuals with damaged credit to refinance expensive debt and break free from the debt cycles caused by predatory lending. Eligible employees can visit our website at http://www.viva-finance.com to see if there is an option that serves their financial needs.