Debt consolidation and refinancing can potentially reduce the cost of your debt by lowering interest rates and/or monthly payments. Then the "extra" money can be applied to reducing debt or to your other financial goals.

Loan consolidation is the practice of combining various smaller debts into one large debt. Consolidation also simplifies the repayment process since you'll have just one loan to manage.Refinancing is the replacement of a single loan with another. Just about any debt can be refinanced, including home mortgages, automotive loans, and even credit card debt.

Loan consolidation and refinancing might seem like a good option if you find an opportunity to significantly reduce interest rates. Here are some factors to consider before applying for a debt consolidation loan:

• Is the interest rate significantly lower? Is any reduction permanent or is it a temporary rate?
• Is the loan term longer than current loans? Lower monthly payments can be attractive, but the total interest cost of the loan should also be considered.
• Are their fees that could reduce the potential savings? Paying $3,000 in home mortgage closing costs to save $100 per month, for example, may not make sense if you plan to move in the near future.
• Could you lose borrower benefits by refinancing? For example, refinancing federal student loans with a private lender will reduce deferment, forbearance, and repayment plan options.

If you're considering debt consolidation or refinancing, we may have a great loan option for you. Give us a call at 844-517-3611 or send us our Live Chat!