Many of the people who turn to the debt consultants at 4 Pillars have researched options to manage the debt issues they are facing. One of the most common recommendations on online websites and blogs is to consider the option of debt consolidation.
While debt consolidation can be a good option, is not the ideal solution for all people. In fact, there are some limitations on the use of debt consolidation that make it impossible for many even to consider.
What is Debt Consolidation?
Debt consolidation is a loan taken out by a consumer from a bank, credit union, or another financial institute to pay off debt. In other words, a larger loan is obtained by the consumer to pay off debts, typically smaller debts that do not include the mortgage or other signficant or secured debts.
The Benefits
Everyone is different, and your debt consultant at 4 Pillars will explain how this process may be a benefit to you. As a general statement, a loan from a bank is at a lower interest rate than found with credit cards, loans, and other types of unsecured debt.
By taking out the loan, the consumer can reduce the interest paid and eliminate any additional penalties or fees. Making one payment also streamlines the repayment process and helps consumers to keep on track.
The Challenges
The most common challenge debt consultants at 4 Pillars see with a consolidation loan is the requirement of a good credit score to obtain the loan. Most people in debt have a low credit score, which means they are not eligible for a loan from their bank.
If you have questions about your debt repayment options, talk to the experts at debt consultants at 4 Pillars. Call us today at 866-690-3328 to book a consultation.
