What You Need to Know About Personal Loans and Debt Consolidation

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Managing debt is a persistent issue for many Americans, and one that continues to grow. According to recent data from the Federal Reserve Bank of New York, the average American has approximately $52,000 worth of debt such as student loans, credit card balances, and auto loans.

Although dealing with debt may feel overwhelming at times, it’s often a manageable problem. The key is to have a plan and a solution that’s right for you. One solution that may be easy to start and simple to manage is a personal loan. While personal loans are often considered a good option for paying other debt and financing large purchases like home projects, they can also be an effective way to eliminate higher-rate debt.

You Can Save Money On Interest

One of the main challenges of debt management is finding a solution that allows you to save on interest. Although it may be tempting to consider a credit card offer with a low APR, a personal loan may be a better option.

This is because most credit card interest rates are subject to change and most introductory offers expire after a set period. By contrast, with a personal loan you know your set regular monthly payment at the outset, helping you avoid unwanted surprises if you make your regular payments on time. What’s more, personal loans have interest rates that are generally lower than those on your revolving debt meaning you could save hundreds or even thousands on interest in the long run.

You Can Lock in a Fixed Rate

Another benefit of a personal loan is the ability to lock in a fixed interest rate. In addition to providing you with peace of mind, this can help you plan out your payments and ensure that you won’t get hit with higher payments over time.

It’s worth noting, however, that not all personal loans are created equal. With a Discover® personal loan, your loan is tailored to your needs. You can choose your loan amount and a flexible repayment term that allows you to pay down your debt in a manageable way. And, with fixed rates, your set regular monthly payment will never change as long as you make your scheduled payments on time.

You Can Simplify Your Bills

As you work on reducing the amount of money you owe, simplifying your bills can have a big impact. With a Discover® personal loan, you can consolidate the balances from your credit cards and other loans into one set regular monthly payment. This can make it easier to keep track of your income and expenses, which can help you keep up with all of your other payments. To make things even easier, Discover can send funds directly to your creditors or your bank account in as little as one business day after acceptance, leaving you with one less thing to worry about.

If you’re like most Americans, chances are you have at least some anxiety about managing debt. Fortunately, the right solution can help you pay off high-interest loans and get your finances on track. By opting for a Discover® personal loan rather than a high-interest credit card or debt settlement plan, you can pay down your balances without increasing the amount of debt you owe. And since Discover personal loans have no origination fees, closing costs, or prepayment penalties, you can feel confident knowing that you’re opting for a loan serving your best interests.

While it may feel challenging to tackle your debt head-on, combining a clear plan with the right solution can help you consolidate your debt and save money in the long-term.

Article Sources

  1. https://www.businessinsider.com/personal-finance/average-american-debt