What Is Debt Consolidation and How Can It Help?
Debt consolidation is a debt elimination and credit repair strategy that involves replacing all of your high-interest loans, credit card debt or personal lines of credit with a single debt consolidation loan. They are especially useful for people with many loans and large balances on high-interest credit cards.
A similar tool, a Credit Card Balance Transfer, can also make it easier to repair your credit. The Credit Balance Transfer offered by OnPath Federal Credit Union lets you transfer the balance you carry on high-interest credit cards to an OnPath FCU Visa with zero percent APR for 12 months.
Debt consolidation isn’t debt forgiveness, but it can reduce your interest accrual and simplify your debt repayment efforts.
Worry About a Single Rate
Instead of accruing massive amount of interest in several different accounts at a variety of rates, you’ll instead only be accruing interest in a single loan at a fixed rate.
Don’t Worry About Keeping Track of and Paying Off Many Debts at Once
People who are struggling with debt frequently have many outstanding loans or credit cards. Keeping track of what you owe to which lenders or credit card companies can be difficult, and it’s easy for payments to slip through the cracks.
A debt consolidation loan combines all those debts. It’s far more difficult to miss payments when you only need to make a single payment every month.
You Don’t Have to Work With a Variety of Lenders or Credit Card Companies
Working with several different credit card companies or lenders can be exhausting, especially when they’re treating you like a delinquent. Debt consolidation customers who use OnPath FCU become part of our member family. You’ll only have to deal with us instead of several different credit card companies, lenders and debt collectors – and we’ll always treat you with respect.
Members also have access to OnPath Rewards, including financial and credit counseling, financial education seminars and discounts on things like car and home insurance through TruStage.
Flexible Terms
Every person’s financial situation is unique. We strive to offer flexible terms that allow you to pay off your debt on a schedule that’s realistic for you. Debt consolidation should be a solution that makes your life more bearable and easier to manage.
Quickly Affect Important Credit Score Metrics, Including Your Credit Utilization Rate
One of the important metrics credit bureaus consider when assigning credit scores is credit utilization – or your total debt divided by your available credit. Carrying high balances on many different credit cards, as well as other loans (student loans, mortgage, auto loan, personal line of credit, etc.), can throw up red flags for credit reporting agencies.
Your credit score might dip slightly at first since you are getting a new debt consolidation loan. There are certain factors, like closing accounts and reducing your credit limit, that might also have short-term negative effects on your credit.
However, the most important credit score factor is whether you make payments in full and on time. If consolidating debt lets you do that, it will improve your credit in the long run.
The Process Is Easier Than You Might Think
If you struggle with debt, you might already be familiar with how hard it can be to get approved for a loan or a credit card. Every lender you approach might question your ability to repay your debts, making approval processes feel invasive and even a little condescending.
At OnPath Federal Credit Union, we treat every member and borrower with respect and kindness. People who come to us for debt consolidation loans are often willing to sacrifice and change their financial behaviors to improve their credit. The process of qualifying for the tools to do that should be as easy as possible.
Phenomenal for Your Peace of Mind
The stress and anxiety people with debt experience is unique. People get harassed by creditors, lose sleep over obligations they can’t meet and worry about what their debt might mean for their family. Seemingly insurmountable debt can make people feel hopeless, which can have terrible repercussions for their mental health.
Debt consolidation can be a way out, and it may lead to a significant improvement in the debtor’s quality of life.
Find Out if Debt Consolidation from OnPath Federal Credit Union Is Right for You
Helping Louisianans consolidate their debt is one of the most important services we offer at OnPath Federal Credit Union. If you’re tired of the harassing creditor calls, juggling loan payments and high-interest credit cards that accrue interest faster than you can pay them off, give us a call.
We require no collateral to qualify and offer competitive rates and terms that can help you get your debt under control.
Call us at 800.749.6193 to find out if you’re a good candidate for a debt consolidation loan.