Among the best ways to pay off your existing debt is through a debt consolidation loan. It enables you to consolidate various consumer debt balances into one loan, commonly referred to as a "debt consolidation loan". This type of loan pays off specific creditors whose terms are not very favorable. If you have a very good credit score, you'll likely end up paying less interest on the new debt consolidation mortgage than if you kept the same payment terms with your creditors. Benefits of A Debt Consolidation Loan The advantage of having a single payment helps you avoid missing payments and reduce or eliminate late fees on outstanding balances. Less stress of dealing with high interest payments, and monthly payments are lower. You can even pay more per month and payoff the debt quicker.You have many options in structuring a debt consolidation loan. You can tailor it to best serve your needs. You can do it with a personal loan, a HELOC (home equity line of credit), a credit card, or perhaps a combination of these strategies, depending on your personal situation. Here is a brief description of how these basic types of debt consolidation loans work.o Car Loans & Credit Cards. If you have many high interest rate credit cards or auto loans with high balances, you can transfer the balances into a lower interest rate first mortgage. By combining the balances of your credit card accounts into just one account, you can considerably reduce the amount of interest you are obligated to pay. o Home Equity Line of Credit (HELOC). Consumers only pay interest on the amounts you borrow. If you own a home with a substantial amount of equity, you may be able to get approved for a line of credit. The drawback to using a HELOC is if you become past due the lender can foreclose on your home. So always be careful when your home is the collateral. Remember that debt consolidation loans are essentially refinancing your current debts. Sure, your monthly payments are reduced, but the repayment period will be for 15-20 years. By making an extra principal payment every month, it can greatly decrease the total interest you will pay throughout the life of the loan.

Make A Decision and Commit To ItFor the last few years, interest rates have been extraordinarily low. With the unwinding of quantitative easing and an improving economy, interest rates have already begun to rise. If you are thinking about a debt consolidation loan, apply online to see what interest rates you'll get. Seek advice from an experienced loan specialist at 1st NWM to determine the best loan for your circumstances.