The Coronavirus pandemic has ravaged the world in more ways than one. Apart from being one of the biggest health and medical disasters, it has also had a far-reaching impact on the world’s financial and economic systems.
Millions of jobs have been lost and families have been hit by hard financial considerations. While we limp back to normalcy, governments are trying to help ease the financial burden of the people at large.
When it comes to repaying loans, EMIs, mortgages, student and auto loans, along with credit card payments, individuals are finding it hard to do so. With reduced salaries, incomes, and no hope on the horizon, everyone is stretched and defaulting left, right and center.
If financial experts are to be believed, a comprehensive way of easing the financial burden is taking help from a debt consolidation loan. In this article, we discuss five reasons why you should opt for a debt consolidation loan during the pandemic.
What is a Debt Consolidation Loan?
A normal individual might have one of the following loans for which he or she would be paying interests and EMIs-
- Student Loans
- Home Loans
- Credit Card Debt
- Auto Loans
- Medical Loans
- Personal Loan
- Mortgage Payments
If data is to be believed the average American citizen has three loans that he makes monthly payments for. Given that we living in the midst of the pandemic with reduced or no income making payments to all the above loans may prove to be practically impossible.
A debt consolidation loan allows you to pay off all your different loans and ensure that you just have one loan to pay EMIs for. This can help you get your finances back in order, prevent you from missing payment deadlines and allow you complete peace of mind.
Most individuals take a debt consolidation loan as it helps them engage with one lender, paperwork, monthly payment dates as compared to ten different ones. If the rate of interest on a debt consolidation loan is favorable, you can use it to get your life back in order.
List of 5 Reasons why you should take a Debt Consolidation Loan during the Pandemic
- Governments have Fixed Low Rates of Interest to encourage Borrowings-
As governments around the world hope to revive their economies, they have directed lenders to start offering loans at the lowest possible rates. Lower interest rates mean that the consumer would be at ease to make easy repayment. When it comes to debt consolidation, when you compare the same with all your other outstanding loans, you will get lower rates of interest.
2. Lending Institutions are Wary of getting Payments and will go for Settlements-
Banks and financial institutions know that millions will be unable to pay off anything back. This means that they would be more than considerate when someone comes to them and says that I would be willing to repay, but only on a settlement offer. This means that you can negotiate hard with the banks for lowered payments during the pandemic.
3. Additional Government Relief in Financial Repayments-
If you can close down all your other loans through a debt consolidation plan, you can seek relief from the government. Anyone who has been affected by the pandemic is well within their rights to ask for relief. Securing relief for ten loans would be impossible, but securing relief for one debt consolidation loan is possible. This is why this is a great time for a loan.
4. Your Credit Scores are not going to get affected during the Pandemic-
Almost all banks and financial lenders have been directed by the government to not alter the credit scores of people who are being unable to pay off EMIs. This means that even if you miss a few debt consolidation loan repayments, you are certain that your credit score will not be affected. You might think that this is a small thing, but it is going to have a lasting impact.
5. You need to get back on your feet after the Pandemic-
A lot of us have suffered innumerable hardships because of the pandemic. We have lost family members, exhausted our life’s savings, and have been rendered jobless. As things start getting back to normal, a debt consolidation loan can help you get back on your feet. It can allow you to get a fresh start, close down past obligations and seek a promising future.
The Final Word
If you are smart and willing to take your chances, debt consolidation during the pandemic might be just the best decision for you. By following all the points in the article, you might just be able to give yourself a fresh start in life. If you wish to explore debt consolidation loans in greater detail, find out more.