Ask Away Blog: Everything You Need To Know About Debt Consolidation with August Funding

Everything You Need To Know About Debt Consolidation with August Funding

Wednesday, May 8, 2019


Are you overwhelmed with debt? Do you have multiple debts with all types of due dates and fees and interest rates?   Do you feel like you'll never get ahead?  Well, you aren't alone and that's why debt consolidation exists.  Debt consolidation is, simply put, taking out a new loan that replaces your current debt.  But how do you know if you will benefit from debt consolidation and if it's worth a shot?  Today, I put together a post with everything you need to know about debt consolidation! 



What is debt consolidation with August Funding?

With a debt consolidation loan you can pay off and combine your credit card debt, personal loans, and other loans.  That means you can: 
  • Simplify your payments from multiple dates and payments
  • Avoid high interest rates which saves you money
  • Pay off debt sooner
Debt consolidation gives you a brand new loan with a new interest rate, new monthly payment, and a new payoff date.  


Many people choose a debt consolidation loan from August Funding when they are drowning in debt.  



How to get lower interest rates with August Funding:


I'm sure hearing that you can get a lower interest rate with a debt consolidation loan has your ears open and eyes ready to read so let me give you some more information about that. Because a debt consolidation loan is a personal loan, the APR can be less than on a credit card.  Anytime you're moving a high interest debt to a lower amount, that's going to help you save money in the long run.  

What are the monthly payment benefits of debt consolidation? 
Did you ever feel overwhelmed by so many due dates that you had to keep in mind and then tracking when and how much you paid on every debt?  Well, when you consolidate debt you get to change your monthly payment.  Rather than have several, you have just one.  You can get a lower monthly payment if you choose a lower interest rate or a longer plan for paying back the loan.  Even though it might take a bit longer, if it leaves you extra money each month for the things you really need then it's a good choice. 

How do I choose a payoff date with a debt consolidation loan? 
It always depends on what your end goal is.  If you want to get out of debt sooner, you can look for a lower interest rate on your debt consolidation loan, but give yourself a quicker deadline to repay the loan.  If you need to save money each month because you are hardly living paycheck to paycheck and constantly struggling, having a lower interest rate AND a longer payoff term will allow you extra money each month to get by. If you choose a shorter term loan your monthly payments will be higher but you won't be paying all that interest in the long run.  If you choose a longer term loan your monthly payment will be lower but you still could pay a lot in interest.  You will have to figure out which choices work best for you and your situation. 

Remember, there are fees!
Most debt consolidation loans have something called an origination fee which can be 1-6% of the total loan amount.  They are taken out of the loan funds BEFORE you get the funds so make sure you take that into account and plan to borrow enough money to cover your debt AND the origination fee. 

No More Debt!!!
If you're going to do all the work to get a debt consolidation loan you absolutely MUST stop getting into new debt, or else there's really no point.  You need to get a on a budget and figure out a safer way to spend money each month. It's very important that you learn how to track your spending and even your debt payoff progress.  Getting into and out of debt is a vicious cycle that shouldn't be repeated.  So if you are seriously considering a debt consolidation loan from August Funding you must be ready to make the necessary lifestyle changes for a better future.  There are so many ways to save money each month and curb your spending so that more of your money can go to your bills and the things you actually need on a monthly basis. 

What if you aren't ready for debt consolidation yet?
Debt consolidation may not always be the answer.  For some of you that have low interest rates already it may not make a big difference.  If you don't think you're ready for debt consolidation you can still try other ways to get your finances in better order first.  

If you make a debt pay off plan that you can actually stick to, it'll keep you motivated and moving forward.  Look for ways to save money, even if it's just a few bucks every month.  Anytime you make extra income use it on your debt and once your debt is paid off, put it towards your savings.   For a long period of time you may have to live differently than those around you, on a tighter budget, which less spending money on "fun" things.  Remember what your end goal is and keep it in the front of your head the entire time.  Of course, you should still allow for budget friendly fun but just make sure you stop and think about every financial decision you make in the future. 

Debt consolidation is not something to be ashamed of either because it's a decision you're making to have a better future and you're actively pursuing the achievement of your financial goals. 

I hope this post has helped you learn more about your options and the benefits of debt consolidation.   Speak to a professional to get more information and see what works best for your specific situation.  Don't be afraid to ask a lot of questions so you understand what you're signing up for. 

Have you ever looked into debt consolidation? Did it work out for you? 



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