Debt problems can make anyone feel like there’s no solution in sight. High-interest rates through credit cards or other loans can derail finances if there’s no pathway to climbing out of debt. Fortunately, debt consolidation loans have offered that glimmer of hope for people in the past.
A debt consolidation loan can be great, but it must be used the right way to make a difference. Dutton Lending, an online lender with a specialization in debt consolidation, wants to help people be smarter when taking out this specific type of loan.
What is a Debt Consolidation Loan?
A debt consolidation loan combines multiple debts into one single loan with a lower interest rate and a fixed repayment term.
With a debt consolidation loan, a person takes out a new loan to pay off all existing debts (credit card balances, personal loans, etc.). Consolidating all debts simplifies monthly payments and potentially lowers the overall interest rate. This helps save money and pay off debts faster.
Debt consolidation loans usually come unsecured, meaning that a person doesn’t need to provide collateral such as a home or car to get the funding. However, lenders may require a person to have a good credit score and sufficient income to qualify for a loan.
How Long Does It Take to Receive Funds?
The time it takes to get a debt consolidation loan can vary depending on several factors. These include lender requirements, the applicant’s creditworthiness, and the amount of paperwork involved in the application process. Online lenders like Dutton Lending process applications and disburse funds faster than traditional lenders.
Assuming that the borrower meets all the lender’s eligibility criteria, the application process for a debt consolidation loan online typically takes less than one business day. The traditional method can take days or even a week. During this time, the lender will review the borrower’s credit report, income, and other financial information to determine their creditworthiness and whether or not they qualify for the loan.
Once the loan is approved, the lender disburses the funds directly to the borrower’s bank account. This process happens instantly online, but some banks might have a hold for an additional 1–3 business days.
What are the Pros and Cons of Debts Consolidation Loans?
Debt consolidation loans can offer several benefits for borrowers, but it’s important to acknowledge that there are cons to this type of loan as well. Responsible borrowers will get the most out of working with Dutton Lending.
Simplified Monthly Payments – By combining multiple debts into a single loan, borrowers can simplify their monthly payments and potentially reduce their overall interest charges. It’s a lot easier to remember a single monthly payment instead of jumping around and paying off several credit cards and loans on different days of the month.
Lower Interest Rates – Debt consolidation loans typically have lower interest rates than credit cards and other high-interest debts, which can help borrowers save money over time. Shopping around for the lowest interest rate and manageable terms can set a person up for success.
Dutton Lending prides itself on offering low-interest rates for qualified borrowers. They work hard to do what they can to set up every single person for a set interest rate that fits them.
Fixed Repayment Terms – Debt consolidation loans typically have fixed repayment terms, which means borrowers know exactly how much they need to pay each month and when they will be debt-free.
This doesn’t mean that paying the set amount each month is the borrower’s only option. To speed up the repayment process and lower the amount of interest paid, making extra payments can be a game-changer.
Credit Score Improvement – By paying off high-interest debts and reducing their credit utilization, borrowers can improve their credit scores over time. This is going to open up more buying power and opportunity down the road.
May require good credit – Lenders typically require borrowers to have a good credit score to qualify for a debt consolidation loan. If the borrower has a poor credit score, they may not get approved or may face higher interest rates.
Dutton Lending tries to work with any type of credit if possible. Some might have to settle for slightly higher interest rates, but they will still be lower than many traditional credit card rates.
Fees – Some lenders charge fees for origination, application, or prepayment, which can all add to the loan’s cost. It’s important to look out for any of these hidden fees. Dutton Lending tries to be very upfront with everything a person has to pay. If a company is discreet about certain fees, it likely means that they aren’t as trustworthy as it should be.
Risk of More Debt – If borrowers don’t change their spending habits, they may pick up more debt on their credit cards and other accounts.
A debt consolidation loan isn’t a ticket to spend more. People still need to change their spending habits and be responsible for reducing their overall amount of debt.
Risk of Losing Collateral – If the loan is secured by collateral, the borrower risks losing the collateral if they fail to make the loan payments on time. The majority of people don’t need to take out a loan big enough that requires collateral. Online unsecured debt consolidation loans work well enough for most.
In most cases, for individuals, the pros outweigh the cons of a debt consolidation loan. If a person is looking for relief, this is a fast and easy way to get it. As long as the focus goes on taking care of business and repaying the loan, it will end up saving the borrower money in the long run.
Can Online Debt Consolidation Loans Be Trusted?
[Alt Text: Debt consolidation companies can help you consolidate all your loans.]
Online debt consolidation loan companies differ quite a bit. It all depends on the specific company and its reputation in the industry. Reputable and trustworthy debt consolidation loan companies operate online and have helped many people manage their loans successfully. Dutton Lending is a perfect example.
Individuals should research before working with an online debt consolidation loan company. They should check the company’s credentials, read reviews from previous customers, and ensure that the company is licensed and registered.
What Makes Dutton Lending Stand Out?
Dutton Lending’s ability to offer great rates while also assisting clients in making the best decisions for their particular case makes them one of the leaders in online debt consolidation loans. They strive to make fast decisions and get people on the right path toward financial well-being.
They promise that the application process takes about five minutes, and a loan decision happens within two hours. Within 24 hours, a person has the loan ready to go. Anyone dragging their feet about getting a debt consolidation loan can kickstart a better future with help.