If you’re mired in debt, you may perk up when you hear about offers to lower your debt and save you money. Offers from credit cards frequently entice you to move your debt to their card with quick incentives like money back or 0% interest for a few months.
Maybe you’d be eager to jump at these offers. But first, ask yourself crucial questions about what it means for your debt in the long run.
What will really change?
You might consolidate your debts into one loan in various ways. You could take out a home equity loan for the total amount you owe in credit cards and other consumer debt. You could put several credit card balances onto only one lower-rate card. Or you could obtain a signature loan, unsecured by collateral, to cover the total debt amount.
While none of these are bad options, studies have shown that used incorrectly many borrowers make financial mistakes and can end up in deeper debt. The steps you take to help your financial situation need to be well planned if you want them to be most effective.
Will this help in the long run?
Let’s say you’re determined to mend your ways, and a debt consolidation loan is one option. You’ll replace lots of payments with one bigger payment. But be sure it fits into your budget.
For credit card offers, consider what you’ll be paying over the life of the loan. Many times that 0% introductory rate balloons up to a rate even higher than you had before you consolidated. The monthly payment is important for your budget, but don’t loose sight of the total payoff.
Can you trust the lender?
A reputable lender will determine if you can afford to pay it back before giving you a loan. But some lenders give loans to anybody just to make a buck. Liberty Savings has professional loan representatives that have your best interest in mind. At the core of everything we do, we are here to server our members, not to make money off high interest loans.
See our site or call us at 201-659-3900 for current special offers on low members-only rates and flexible terms to give you affordable payment options.
Want even more convenience? Ask about automatic payments or payroll deductions to get your loan paid off with less worry and stress.