For anyone struggling with substantial debt from credit cards and other unsecured loans, a consolidation loan from a local Credit Union can provide immediate financial relief. The debt consolidation process involves combining separate high interest loans into one single balance and monthly payment.

Debt consolidation typically provides a lower interest rate than the combined rate of the outstanding bills. Multiple loan payments with different due dates can be eliminated to save time and money. The added convenience of consolidated debt will help reduce the possibility of inadvertently submitting a late payment.

Benefits of Consolidation Loans

There are a variety of benefits associated with a consolidation loan such as:

• Improved Budgeting: Several bills can be replaced with one easy payment making the budgeting process far less complicated.
• Reducing Stress: With a consolidation loan, the stress of dealing with multiple creditors is eliminated. They are all paid in full, and the borrower only has one current loan with their Credit Union.
• Lower Interest Rate: A Credit Union consolidation loan usually offers a lower interest rate than credit cards and other unsecured personal loans.
• Better Credit Score: Credit Scores improve when multiple debts are repaid through a consolidation loan.
• Lower Monthly Payment: Consolidation loans can be extended for a longer term than most unsecured loans. In combination with lower interest rates, the resulting single monthly payment will usually be much less than the combined payments of the other debts.

Understanding Credit Unions

Credit Unions are organized and chartered by members of a local community, employees of large companies, or associations. While they offer many of the same services as a bank, account holders at a Credit Union are also members and owners.

The tax exempt status of Credit Unions allows them to offer exceptional interest rates on their loan products. Credit Union members are treated with courtesy and respect. And qualifying for a consolidation loan can be quicker and easier than the process at a traditional bank.

Consolidation Loan Checklist

Before applying for a consolidation loan at a Credit Union, it is important to open an account and become a member. Obtaining a current credit report will help establish borrowing limits and identify problem loans and credit cards targeted for consolidation.

It is important to calculate the total amount owed to determine exactly how much to borrow. Perhaps most importantly, begin the budgeting process to avoid creating another unmanageable financial situation. Your local Credit Union can help provide debt counseling assistance to ensure a future that is financially sound and worry free.