debt consolidation loans

Debt Consolidation Loans

Consumer debt in the U.S. currently sits at around $4.2 trillion. Between car loans, credit cards, and other types of debt, Americans are struggling financially, and many feel as though they’ll never be free. Can you relate? Are you desperate to get out of debt as quickly as possible? If this is the case for you, one of the most effective ways to control your finances is by taking out a debt consolidation loan. Read on to learn more about debt consolidation loans, how they work, and how to get one.

What Are Debt Consolidation Loans?

A debt consolidation loan is a type of personal loan that you can use to combine (or consolidate) all of your debts. In other words, you take out one big loan, use it to pay off all your other debts, then focus on paying off that one loan. Rather than making several different payments each month, you have to worry about one.

Pros And Cons Of Debt Consolidation Loans

As with any money management strategy, there are pros and cons to using a debt consolidation loan to pay off your debts. Here’s a breakdown of some of the benefits and drawbacks to keep in mind:

Pro: Pay Debt Off Faster

The first benefit of debt consolidation loans is the fact that you can pay off your debt faster. When you take out a debt consolidation loan, you’re often able to lower your interest rate. That, in turn, means you’re paying less money each month than you would be if you were paying off all your debts individually. Since you’re repaying less money overall, you’re able to get rid of your debt sooner.

Pro: Simplify Your Finances

Debt consolidation loans simplify your finances a lot, too. How many debts are you trying to pay off right now? Do you have a car payment? Multiple credit cards? A line or two of credit?

It can get confusing trying to remember the due dates for all of these payments, especially when you factor in the payment dates for your other bills (utility bills, rent, etc.). With a debt consolidation loan, though, you only have to worry about one payment per month. That means you’re less likely to forget (and get hit with those pesky late fees).

Pro: Build Your Credit

In the long term, a debt consolidation loan can help you to build your credit, too. The faster you pay off your debts, the sooner you’ll be able to boost your credit score. That, in turn, makes it easier for you to qualify for better loans in the future, should you need to take them out. It also increases your chance of getting approved for an apartment or mortgage.

Con: Upfront Costs

You may have to deal with some upfront costs when you take out a debt consolidation loan. That includes things like loan origination fees and balance transfer fees. In the short term, these expenses can set you back a bit. Long-term, you’ll likely end up spending far less than you would have if you’d continued to pay off each debt individually.

Con: Temporary Credit Hit

When you first take out a debt consolidation loan, your credit will take a slight hit. That is because you’re essentially taking on additional debt. Once you pay off all your other debts, though, and make some consistent payments on this larger loan, your score will start to increase, and you’ll be in a better place than you were before.

How To Get A Debt Consolidation Loan

Do the pros of a debt consolidation loan outweigh the cons for you? If so, here are the steps you’ll need to take to qualify for one:

Build Your Credit First

In some cases, it’s better to wait and build up your credit score a bit before you take out a debt consolidation loan. That is the case because your credit score influences the types of loans for which you qualify. By increasing your score, you’ll be more likely to qualify for a loan with a lower interest rate, which will help you to pay off your debt faster.

To raise your credit score, spend a few months being extra-diligent about making loan and credit card payments on time. Check your credit report, too, and correct any errors that might be lowering your score.

Make A List Of Your Debts And Payments

Next, make a list of all the debts you owe and the monthly payment required for each one. That helps you get a better idea of how much you need to borrow to pay everything off.

Compare Lenders

Once you know how much you need to borrow, start doing some research to find a debt consolidation or cash lender who can help you out. The best debt consolidation loans will cover at least the majority, if not all, of your other debts with a relatively low-interest rate. Compare a few different lenders to find the one with the best rates and terms.

Apply For Debt Consolidation Loans

After you’ve chosen a lender, your next step is to apply for a loan. Most lenders allow you to submit directly from their website and will get back to you within a few days to let you know if you’re approved.

Make Payments On Time

When your loan has been approved and comes through, use it to pay off your debts. Then, be diligent about making your new loan payment on time each month. Stick to the payment schedule, and you’ll be on your way to debt-free living!

Are Debt Consolidation Loans Right for You?

You now know a lot more about the advantages of debt consolidation loans and the way they work. With this information in mind, are you interested in taking this approach to money management? If so, we’re here to help at Champion Cash Loans. Check out our FAQs page to learn more about how we work, or fill out our quick form today to see how much you can borrow!

© 2024 Champion Financial Services DBA. Champion Cash Loans


California: All loans are made or arranged pursuant to a California Finance Lenders Law License Number: 60DBO-35846.
Arizona: Loans made pursuant to Arizona Department of Financial Institutions Sales Finance Company License SF-1005405.

*Our loans can be up to $50,000 depending on certain factors. Depending on the time when the application is submitted, the funds could be given the same day or next day.

**Loans with an annual interest rate of 36% are limited to loan amounts between $2,500 to $9,999.00, while supplies last. The actual loan amount, term, and Annual Percentage Rate of the loan that an applicant qualifies may vary by applicant, lender, and the law requirements of those terms. Minimum loan amounts, terms, and rates may vary by state. Consumers need to demonstrate the ability to repay the loan.

THIS LOAN (Auto-Tile or Personal Loan) IS NOT INTENDED TO MEET LONG-TERM FINANCIAL NEEDS. Loan proceeds are intended primarily for personal, family, and household purposes. This service does not constitute an offer or solicitation for consumers in all states. This service may not be available in your particular state. The state of this site services may change from time to time without notice.

The actual loan amount, term, and Annual Percentage Rate of the loan that an applicant qualifies may vary by applicant, lender and the law requirements of those terms. Minimum loan amounts may vary by state. Consumers need to demonstrate the ability to repay the loan.

CFS Investments is licensed or registered as a finance lender as required by applicable state law and does not offer or service student loans. CFS Investments is not providing financial advice and does not warrant the accuracy of information as it subject to change without notice about its current product guidelines.

*CFS Investments may act as the broker for the loan, and may not be the direct lender or servicer of your loan. All loan applications are subject to meeting underwriting and credit criteria, which includes providing acceptable property as collateral. The actual loan amount, term, and Annual Percentage Rate of the loan that an applicant qualifies may vary by applicant. Minimum loan amounts may vary by state. Consumers need to demonstrate the ability to repay the loan. Credit Approval is subject to the credit criteria standards. A bank account is required as a condition and in order to obtain a Persona Loan. Loan proceeds may need to be disbursed via Automatic Clearing House (“ACH”) to the borrower’s bank account. The actual availability of funds can vary based on bank processing times, daily ACH deadlines, and weekends and holidays. Inquiring for a personal loan and its minimum requirements does not impact your credit score, however, completing a full application may affect your credit score.

CFS Investments, Inc. dba Champion Financial Services, Top Cash Loan, and PrestaQuickly. The terms and conditions set forth within the “General Terms and Conditions, up to and including but limited to the “Wireless Policy” applies to all CFS Investments, Inc. owned or operated websites in the aforementioned “DBA’s”.

If you are using a screen-reader and are having problems using this website, please give us a call at 1-888-798-1970 for immediate assistance.