Debt Consolidation Loan An Effective Way to Get out of Debts for Single Mothers
Playing the role of a mother is truly challenging but the task becomes doubly difficult if you are a single mom. Most single mothers encounter financial and other issues on a much larger scale in comparison to an average debtor. These mothers are busy with their office work, household chores, and even responsibilities to their children. Single moms are often grappling with debts but they deserve your respect as they try their best to cope up with debt issues and the financial turmoil that is ruining their lives. For all those single mothers who are presently encountering huge monthly payments because of multiple loans pending in the market, consolidating these debts could be an effective way of avoiding bankruptcy.
Avail a Debt Consolidation Loan
Things become even more complicated when moms are worried primarily about their child’s education. According to https://www.forbes.com, “The problem comes when mothers save for education costs above other financial priorities. Before funding a 529 plan, it’s a good idea to first set aside enough savings in an easily accessible emergency fund to cover at least 3-6 months of necessary expenses.” In this context, mothers need to understand the priorities well and do financial planning accordingly. However, when a single mom is trying to get out of debt, the best way to tackle multiple debts is to opt for a debt consolidation loan. Debt consolidation programs are known to provide excellent coverage to all those single moms who are looking for an effective way of coming out of the debts they are currently trying to combat to get a debt-free future. Let us explore the chief benefits of availing a debt consolidation loan, as far as, a single mother is concerned.
One Single Payment Instead of Many
One of the greatest challenges associated with managing multiple debts is effectively dealing with multiple payments that should be leaving your bank account every month. Often even the most capable and organized person may fail to keep track of so many payments and remember so many different due dates every month. This could prove to be immensely stressful for a single mom as she is already having far too many issues at hand. If you are a single mother, you would need to constantly plan and ensure that you have enough money for making the payments at different times during the month.
The payment amount would be varying and it would be overwhelming for you to stay on top of every payment and keep a constant tab on what precisely is getting out of your bank account at a particular point of time. You are constantly devoting time toward making sure that there is adequate money to make the payments on time and as required.
Life is really stressful for a single mother with multiple debts. However, life could become slightly easier and you could go about eliminating your debt in a far relaxed and stress-free manner provided you opt for a debt consolidation loan. Once you take out a debt consolidation loan, you would be repaying all your existing debts going towards multiple creditors. With debt consolidation, you would be rolling multiple debts into one single larger debt that is far easy for you to handle and keep constant track of.
You need to make a single repayment every month to just one lender and you need to remember only one due date in a month. Moreover, often you get more time to repay your debt. Even though your repayment period is longer, you may still end up saving some money because the debt consolidation loan interest is usually lower. You may go through debt consolidation reviews online to get an idea of how to forge ahead towards a debt-free future with a debt consolidation loan.
Reduction in Your Stress Level
Life is pretty stressful as it is for a single mom. You have many issues to handle single-handedly. In such a situation, it could be truly overwhelming to pay off numerous debts every month. Things could get even worse if along with keeping track of multiple debts, repayment schedules, due dates etc., you are compelled to take distressing collection calls and respond to numerous letters from your creditors or collection agencies every now and then.
A debt consolidation loan could prove to be a boon for you in such a situation. It could help change your life dramatically as you would no longer require to deal with multiple creditors and you would not feel scared each time your phone rings. Now you could rest assured that you would not miss your single payment every month and so there would be no question of damaging your credit score any further.
Lower Interest Rate Hence Some Money Savings
Often, your debt consolidation interest rate is relatively lower as compared to your previous high-interest credit card debts. You must, however, examine the exact interest rate while applying for the debt consolidation loan. If you have got a debt consolidation loan at a relatively lower interest rate as compared to your existing multiple credit card loans, you could make substantial savings every month. All your previous debts would be erased from your credit file and gradually, your credit file would be repaired as you go about making one repayment consistently every month. Your outstanding debt balance would be going down consistently as long as the repayment is done timely every month. You may consider making additional payments with the saved amount every month as that could help in maintaining and potentially boost your credit score.
Debt Consolidation with a Secured Personal Loan
Secured loans are regarded as guaranteed payouts and you could avail them by offering a collateral like your car, home, property, or some other valuable asset that would be claimed by your creditor once you start defaulting. The greatest advantage of taking secured loans would be relatively lower interest rate as compared to the unsecured loans. Moreover, secured loans would be allowing a higher borrowing limit that should be just right for repaying your single debt consolidation loan. However, you need to consistently make the repayments otherwise, you are putting your assets at a grave risk of being taken away. The thought that you would lose your car or home or some other valuable assets, would be keeping you on your toes and you would be making the repayments consistently and timely.
Debt Consolidation with an Unsecured Loan
You do not need to offer any collateral for availing an unsecured loan. However, you need to keep in mind that the interest rate would be slightly higher in comparison to a secured personal loan. The single mothers who are applying for such unsecured personal loans for debt consolidation must keep in mind that there would be some specific restrictions regarding what the money would be used for and also, the borrowing limit would be lesser in comparison to the secured loans. These unsecured loans are the best option for those single mothers who are neck-deep in debts and have no collateral to offer.
Conclusion
Debt consolidation may be the road to freedom from your debts but you must remember that debt consolidation does not automatically give you instant relief from your financial burden. It simply shifts the financial load from one place strategically, to another place. You need to be patient and consistent in your repayments to reap the benefits later. Understand the root cause of your current financial distress and make lifestyle modifications to stay away from any debts in the future.
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Appreciation from Frances and Patrick Connolly
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Appreciation from Frances and Patrick Connolly
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