There are so many bills that come to your house each and every month. It can be hard to figure out what bills you are going to pay in full and which ones you make a partial payment on when you aren’t able to cover everything. After a while, the bills stack up and you start owing more than you can pay, even when you try hard. You could consider a bill consolidation loan. Can you make money with a bill consolidation loan? You can, at least, simplify your life and your payment process.
Here are some details about the bill consolidation loan option.
What Is Bill Consolidation?
If you have debt to providers, creditors, or anyone else, you could apply for a debt consolidation loan. The loan funds, once you receive them, can be used to pay off all of the bills you owe so you are in the free with those providers. Then, all you have to do is pay for the loan in monthly installments. Usually, the loan interest rates are going to be lower than other interest rates, penalties, late fees, and so on that you might have with other creditors and providers. The rate on the loan is a fixed rate, locked for lifetime. You pay the same amount every month and you have an end date in sight. You know just when you will be debt free and out from under that loan. If you are able, you can even pay more on the loan to make the time go faster.
Debt consolidation loans can come from traditional lenders, like your bank, but you might only be able to get a loan from those lenders if you have good credit to your name. There are certain standards you will have to meet in order to get approved for the loan. There are plenty of other lenders that have non-traditional requirements that might be able to help you without having a high credit score and other such things.
How The Process Works
In a way, when you get the loan, you basically transfer your debt from the other providers and creditors to the loan. There may be some loan origination fees and closing fees, but otherwise, the loan money is yours and you simply have to pay the monthly amount that you have agreed upon. You can work with your lender on how much you are able to afford and what length of time will work for your payment plan.
Important Debt Consolidation Factors
Loans that clear your debt to other lenders and place it all in one location can help you to make budgeting easier overall. It simplifies your payment plans and allows you to pay only one creditor. You will also likely have a lower interest rate, so it’s nice to know that you will pay less on the loan overall. You can get more details on the differences on www.bills.comandthat can help you understand even more about the process. Before applying for a loan from any company, you want to make sure they are reputable and have a nice low APR. You can get details about their history and experience in the industry online, both on their website and with outside reviews. Often, you can apply for the loan you need online, but you can also get advice from the professionals by phone or in person.
Getting Your Finances In Order
While debt consolidation loans are going to help you streamline your budget and pay off your debt in a monthly manner over time, the process isn’t going to rectify your financial issues unless you make some changes to how you do things. You are going to want to get yourself on a budget that you can stick to–and then stick to it. It’s important to make those monthly loan payments so your credit score won’t suffer. Instead, it can rise. If you don’t stop spending too much, however, the loan will help one side, but it can’t cover new debt. When you continue bad spending habits, that can make your debt rise all over again and you will find yourself in trouble.
How You Can ‘Make Money’ With Debt Consolidation
Now that you have more details about bill consolidation loans, you might understand a bit how some people feel like they are making money from the process. There are several ways this might be the case.
- The Lower Interest Rate
Since you have a lower interest rate on this loan than you would have with the other debt you had, you pay less on a monthly basis and for the length of the loan. Because of that, you may have extra money in your budget. It is wise to save that money for emergencies, or perhaps put more towards the loan amount. But you might feel like you ‘made money’ with the process.
- The Loan Amount
You can ask for whatever you need in the loan amount, but some people add up their debts and then ask for a little more than they actually need. That can give them a little wiggle room to pay for bills and other necessary things while they get their budget in order. In a way, they ‘made money’ from the loan because they were able to pay off their debts and they had a little extra left over to take care of other things as well. All of the money will have to be paid back, as agreed, no matter how much you get or how you use it.
- The Feeling Of Freedom
If you have been trying to pay down your debts, to no avail, when you get the bill consolidation loan and are able to pay those bills off, you might feel free. You aren’t completely in the clear yet, because you still have the loan to pay, but you may very well feel a sense of freedom. You feel rich, in a sense, because you no longer have debt collectors calling you, penalty fees racking out, and interest rates adding up like crazy.
So, can you make money with a bill consolidation loan? In many ways, you can, but you are going to want to think deeper than that. Research companies you consider working with so you are certain they are reputable and will treat you well. Look into their programs with a fine-toothed comb as well so you know just what you are getting into. You don’t want to agree to a program that will make things worse for you, but instead, you need just the right plan to suit your needs.