Benefits of New Personal Loans in Solving Unpaid Debts
Are you having trouble paying your bills? Do you often get messages from lenders asking you to pay your dues? Or have you been worrying about losing your home or car? Between car loans, credit cards, and student loans, debts can often go out of control without you even noticing.
You may be racking your brain right now for a solution to your current crisis. If you are facing financial difficulties, borrowing money might be the last thing on your mind. However, studies have shown that a significant percentage of borrowers can use a new loan to help solve their debt problems.
According to TransUnion research, almost a third of borrowers experiencing debt problems saw a significant improvement in delinquent debts when they borrowed money. Additionally, one-quarter of borrowers who obtain a new personal loan performed well at paying it off. It may come as a surprise since people think that taking a new loan is not the answer to paying your existing ones. However, it also makes sense because it can help borrowers pay for their current debts.
Here are the top two benefits of taking a new loan to consolidate and pay off existing debts:
A new loan helps avoid additional fees.
Additional fees are the common headaches of borrowers. These fees go on top of your monthly principal payment and interest due to unpaid debts. For example, suppose you maxed out your credit cards and can’t pay the monthly due. If you did not pay on time, you might be charged for late payments and over-the-limit fees.
Additionally, if you choose to take payday loans, you can end up paying different fees for every new loan. With a new personal loan, you will no longer be charged for these fees. Many lenders offer personal loans without any additional fees, such as application fees, upfront fees, and origination fees. Moreover, you can use the money to pay off existing loans and focus on your new debt.
You can get a new loan even when you’re struggling with debt, but the process is complicated. You can refinance a high-interest debt to an affordable loan to make your life easier and stress-free. You can even get a new loan at lower interest rates, better terms, and lower monthly payments. Just be sure that you can pay off the new loan and learn to live within your means.
A new loan can pay off existing debt with lower interest.
In times of need, people use their credit cards or payday loans to purchase goods or services. Unfortunately, these loans are considered high-interest consumer debts, which makes paying them off extremely challenging. If you are paying several loans without earning much, you can end up in deep financial trouble.
A new loan with a low interest rate can ease your burden. Suppose you have an existing credit card that charges you 15% or more in annual interest. With a personal loan, you can pay a 10% interest rate. The rates are lower, making it easier to pay existing debts.
Paying several loans is difficult for anyone, especially if your income doesn’t match your monthly expenses. A good option for you is to take a personal loan to pay off existing debts. However, the best solution is to live within your means.
If you need new and small personal loans, we’re your best choice. We at Parkway Finance provide a variety of personal loans in Centerpoint, AL, to fit your needs. We will review our different options, and upon approval, put clients on an affordable payment plan. We do not make payday or title pawn loans, and there are no hidden fees.