Understanding the other side of Debt Consolidation Loans
Written by: Debarati Dhar
In recent years debts have became a part of most of our lives.
Almost all the things are made available to us via credit.
However, this easy availability of credit has its own share of
pitfalls. Some of the borrowers take excessive amount of debts
and have trouble repaying them. The excessive amounts of debts
taken can lead you to serious consequences.
Now, before going into the details of credit and debts, let's
learn about the origin of them. It is said that the first known
use of credit was about 3,000 years ago in Assyria, Babylon and
Egypt. It came to other parts of the world with the growing
demand of needs and wants of the consumers.
It should be remembered that if you fail to repay your debts, it
can lead to serious consequences. You might find it difficult to
come out of the trap of debt. However, you don't have to worry.
There are options available to help you come out of the debt
It has been observed by the experts that one of the best route
via which you can come of the debt trap is by taking up a debt
consolidation loan. A debt consolidation loan is
specifically designed to help you come out of the trap of debt.
A debt consolidation loan is attached with a
range of benefits. Let's check out some of them:
*The rates of interest for debt consolidation loans are
generally lwer than that on unsecured personal loans and credit
*It is easily affordable and manageable.
*The term of loan offered is longer.
*You have to deal with a single lender.
Debt Consolidation Loans can be both secured as well as
unsecured. A secured debt consolidation loan is attached with
collateral, mostly in the form of your home. In contrast,
unsecured debt consolidation doesn't require any collateral
against the loan. However, it should be kept in mind that the
rate of interest charged in secured debt consolidation loan is
generally lower than unsecured ones.
Like any other form of borrowing, a debt consolidation loan also
needs to be repaid. So, before applying for a debt consolidation
loan, make sure that you can afford the monthly repayments. If
you fail to repay your debt consolidation loan, it can lead to
serious consequences. In case of secured debt consolidation
loan, your lender might even repossess your home, if you fail to
About the author:
The author is a business writer specializing in finance and
credit products and has written authoritative articles on the
finance industry. She has done her masters in Business
Administration and is currently assisting Loans-bazaar as a
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