Debt Consolidation: A Brief Overview On How It Works

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Before you consolidate your debt, you’ll have to decide on a debt consolidation strategy that you will use ahead. Usually, it’s possible to consolidate debts with or without a loan. It’s easy to find debt consolidation loans from an online legal moneylender Singapore or a bank. If you choose a non-profit credit counseling agency, they will provide you all benefits of a debt consolidation loan in Singapore without making you take out new credit.

Debt consolidation with a loan:

First of all, you have to list down the debts you’re willing to consolidate. Next to all your debts, write down the total amount you owe, your monthly payment due, and the paid interest rate. After that, add the total amount you owe on all of the debts and place it in a single column. Now you’ll know how much money you’ll have to borrow using a debt consolidation loan.

When you add all the current monthly payments for each debt, put the final amount in another column. That would give you a number to compare with for your debt consolidation loan. Your next step should be to approach a bank, an online lender, or a credit union. You can ask them for a debt consolidation loan that covers the amount you owe to creditors. You must ask them about the monthly payment and their interest rate charges.

Lastly, you’ll have to make a comparison between the amount you pay currently, each month, and what you would have to pay if you get a debt consolidation loan.