Financial planning has been a hot topic of discussion for many Americans coming out of the quarantine period with limited funds or smaller incomes. Struggling to pay off debt can lead to late payments and diminishing credit ratings.
While maintaining a decent credit score is the goal, having a low rating is not the end-all-be-all when your livelihood is at stake. Make the process easy on yourself, and knock out two targets with one effort. How? Use a debt consolidation loan to pay what you owe and help improve your credit score.
Make Regular Payments On Time
One advantage of a debt consolidation loan is the ability to pay off multiple credit cards at once and then make a single loan payment each month. A reduced number of due dates each month also reduces the risk of late payments. Debt consolidation loans have fixed rates, meaning the interest rate won’t change over the life of the loan. With a debt consolidation loan, you’ll spend less money each month to pay off the same amount of debt. If you want to improve your credit score, take the time to budget your funds each month, and ensure that you can afford your regular payments.
Reduce Your Credit Balance
Depending on your situation, you may not be able to eliminate all of your credit card debt with a single debt consolidation loan. Use the loan to pay off what you can and try to reduce the balance of any remaining credit cards to less than 30% of your credit limit. The ratio between your available credit and your balance is your credit utilization, which is a primary factor affecting your credit score. Once your balance is below 30%, manage your spending to keep it there. Any progress you’ve made on your credit utilization will disappear quickly if your credit card balance goes back up.
Find A Debt Consolidation Loan
Applying for loans you can’t qualify for can hurt your score. That’s why you should consider Lendah. One application with Lendah is all it takes to find options for a debt consolidation loan from a network of more than 30 lenders. Best of all, checking your options at Lendah has no impact on your credit score! Don’t waste time filling out multiple applications at different lenders. Cast a wider net and get results faster with our help.
If you have questions about debt consolidation loans, speak to our team of knowledgeable professionals. Our compassionate loan matchmakers will find the best terms tailored to your unique situation with fast approval and rates starting as low as 3.84% for amounts up to $100,000.
Get started today on our website. Prefer to talk in person? Call us at 833-453-6324 and we’ll get you connected immediately with one of our loan experts.