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Why Should You Look into a Debt Consolidation Loan?


Figure standing on mountain top with sun setting in background

Often a debt consolidation loan seems like an unrealistic solution—something too complicated or far-fetched to solve the fiscal problems that many people have. In truth, debt consolidation is a great way to get your finances back under control, no matter who you are.

If you’re looking for help with overdue bills or credit-card payments, a debt consolidation loan could be exactly what you need. Read on to find out why.

1. Makes your debt easy to manage

Debt consolidation takes all your existing payments and combines them in to one, giving you a single payment to one lender. This vastly reduces the chances of missing another payment and creating additional late fees. Having a consolidated loan can also help you make payment plan changes later, if the need arises.

2. Lowers the interest rate

All your late payments and bills will be accruing interest over time. Some of them are bound to have higher interest rates than others. If you’re behind on payments, chances are there is interest racking up on top of your bills, and this is going to draw the process of repayment out even longer.
The biggest benefit to a debt consolidation loan is that it helps prevents this situation from happening. Essentially, by using a debt consolidation loan to pay off all your outstanding debts, you’re excluding all the potential interest on your multiple loans. This has a high chance of working out to lower overall interest payments in the long run.

3. Better for your credit score

One of the major drawbacks of falling behind on payments is the negative impact it can have on your credit score. When you miss a payment, your credit score will reflect it. And the worse your credit score gets, the harder it will be for you to borrow money again.

One of the great things about debt consolidation is that you stand to improve your credit score by streamlining your repayments and sticking to them. This is one of the best ways to repair any damage you may have inadvertently done.

4. Better for your peace of mind

Let’s face it—being in debt is stressful. Not only does it drain your finances, it can take a toll on your willpower. By consolidating your debts, you might be surprised by just how much a difference it makes on your mental and physical state. Even though the amount you have to pay is more or less the same (outing aside the reduced interest of a debt consolidation loan) having only one payment to make can be a huge relief. And the fact that you no longer have to think about spinning multiple plates at once can be a massive weight off your shoulders.

Borrowing money is supposed to help you achieve your goals. What’s the point of achieving them if you’re too stressed out to enjoy them? Ultimately, stress can find its way from your finances into all the other parts of your life too; work, hobbies, even relationships. Not to mention this sort of stress can be a self-fulfilling prophecy! If you’re too stressed to manage your finances well, you’re only going to get more stressed, and have more trouble managing your finances! Get ahead of the game with a debt consolidation loan from Nectar.

Get a debt consolidation loan from a lender you trust

Nectar is a trusted name in the world of NZ loans. If you’re falling behind on your bills, or if credit-card debt is getting out of hand, we’re here to help. Give us a call today, and we’ll talk through your options with you.

So, what do you think ?