<p style="text-align: justify;"><span data-preserver-spaces="true">There is no denying that debt is an integral part of your life, and depending on your needs, you will have a build-up of debt over time. This means multiple bills with high-interest loans, and if left unattended, it is likely to get out of hand. Thankfully, there is a way out of all this, and it isn&#8217;t as difficult as you think. </span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true"><a href="https://newsforpublic.com/debt-consolidation-not-best-solution-for-cash-flow/">Debt consolidation</a> is one of the solutions for managing debt better. Put simply; it is converting all your debt into a single loan. You not only pay a lower interest rate, but it is easier for you to monitor a single monthly payment. </span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">You need to keep in mind that debt consolidation is a wise move only if you are able to clear your monthly dues on time and if the total interest payout is lower than what you are currently paying. If you want to know the benefits of debt consolidation, then read on. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Single Payment Deadline </span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">When you have multiple loans or credit cards, there are multiple due dates that need to be remembered. With </span><a class="editor-rtfLink" href="https://www.creditspring.co.uk/debt-consolidation" target="_blank" rel="noopener"><span data-preserver-spaces="true">debt consolidation loans bad credit</span></a><span data-preserver-spaces="true">, you have a single due date to remember. You are able to manage your finances better since not only is there a single payment to be made, but the total amount you pay is also less. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Competitive Interest Rates</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">The interest rate on your new loan would depend on your credit score. If, for example, you have an Equifax score of 750 or more, it would help you negotiate a lower interest rate. When you consolidate your high-interest credit card loans into a single low-interest one, you pay less interest depending on your credit score. </span></p>
<p style="text-align: justify;"><img class="alignright size-full wp-image-17585" src="https://newsforpublic.com/wp-content/uploads/2021/03/interest-rates.jpg" alt="interest rates" width="750" height="461" /></p>
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<p style="text-align: justify;"><span data-preserver-spaces="true">You stand to gain by consolidating your loans even with your current credit score, no matter how high or low it might be. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Better Credit Score</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">An important factor for your credit score is your credit utilisation rate. This is the total debt you have at the moment divided by your credit limit. If your debt is GBP 3000 and your credit limit is GBP 10000, then your credit utilisation ratio or CUR is GBP 3000/GBP 10000 or 30%.</span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">As a rule of thumb, keep your CUR to 30%. Your total dues are calculated as the sum of your principal outstanding and the accrued interest, so when your interest goes down due to consolidation, so does your credit utilisation rate. When you pay off the dues on time with lower interest, your credit score improves. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Shorter Repayment Period</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">You may </span><a class="editor-rtfLink" href="https://www.creditspring.co.uk/payday-loans" target="_blank" rel="noopener"><span data-preserver-spaces="true">find payday loans online</span></a><span data-preserver-spaces="true"> that could be very tempting with quick loans for borrowers with a low credit score. These loans come at high-interest rates and could damage your credit score further. </span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">A better choice would be on-demand loans that don&#8217;t carry any interest or hidden fees. Repayments can be scheduled according to your convenience, and most importantly, you improve your credit score so that you can get loans at lower rates in the future. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Positive Cash Flows</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">When your monthly interest rate burden goes beyond your control, you start having negative cash flows with your expenses exceeding your income. This situation puts you into a perpetual debt trap, and you end up building up more debt by taking fresh loans. </span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">When you consolidate your debt, your interest outgo falls, and your total monthly expenses go down. With your income remaining the same, you are likely to enter into the positive cash flow territory. From a borrower, you can turn into a saver.</span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Realising Financial Goals</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">While debt like student loans or home loans are important, when they snowball out of control, you may have to liquidate your investments intended for long-term financial goals like your retirement or a much-awaited trip. You pay for these long-term goals through regular monthly investments. </span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">When your savings dry up due to your high debt burden, you can&#8217;t invest in your financial goals any longer. Whatever you have set aside may have to be withdrawn to pay off your debt. Consolidating debt ensures that you avoid this unpleasant situation. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Easier Access To Loans</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">Consolidating your debt means improving your credit score, and there are multiple benefits for you. Your chances of getting your loan approved are much higher. You will be entitled to higher loan amounts, favourable interest rates, and longer repayment periods. </span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">A higher credit score improves your bargaining power about loan terms and conditions. Renting an apartment becomes easier since landlords prefer tenants with a good credit score. You might pay a high-security deposit if you have a poor credit score. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Budgeting Is Easier</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">Your monthly debt servicing forms a part of a monthly budget. When you know how much you need to spend monthly, including your debt repayments, drawing up a budget becomes easier. When you receive your income at the beginning of the month, you know what to set aside so that there won&#8217;t be any cash shortages at the end of the month.</span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">When you review your monthly budget, you can weed out any non-essential expenses and make sure that you don&#8217;t overshoot your budget. In the long run, this discipline will make sure that your overall loans come down. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">No Loss of Collateral</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">In the case of a secured loan, the lender needs collateral as an assurance. If the loan is not paid timely, the collateral is sold to realise the dues. </span></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">When you consolidate your loan, your interest payout is lower and within your limits. If you have taken a secured loan, then the lender cannot repossess your asset since you pay your monthly dues on time. </span></p>
<h2 style="text-align: justify;"><span data-preserver-spaces="true">Lower Stress Levels</span></h2>
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<p style="text-align: justify;"><span data-preserver-spaces="true">Stress over the long term damages your health, and a mounting monthly interest burden certainly gives you sleepless nights. Debt consolidation ensures that you control your monthly dues, which brings down your stress levels. Debt management helps you with stress management and keeps you in better shape. </span></p>
<p style="text-align: justify;"><strong>Final Thoughts </strong></p>
<p style="text-align: justify;"><span data-preserver-spaces="true">There are multiple benefits of keeping your debt in check, and debt consolidation is one effective way of doing it. When you consolidate your high-interest loans into a single low-interest loan, not only does your credit score improve, but you are also able to protect your long-term financial goals.</span></p>

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