Conslidate debt consolidation consolidating loans credit

When you consolidate, you’re bundling two or more loans together, taking a new loan to pay off all existing loans.Debt consolidation is a form of refinancing, but not all refinancing is debt consolidation.

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Next, add together all of your existing loans to determine the total amount of your current debt.

Average together the annual percentage rate (APR) of each loan you are consolidating.

When shopping for a consolidation loan, make sure that the new APR is the same as or less than the average APR for all of your current loans.

If so, and if you’re comfortable with a new, longer-term repayment schedule, go ahead and take the loan, and use it to pay off your existing debt.

If you just replace one loan with a new loan at a lower interest rate, that’s refinancing.

Debt consolidation converts multiple loans into one loan.

Just don’t forget to make monthly payments on your new consolidation loan!

Various providers offer small business debt consolidation loans.

Business debt consolidation loans refinance your existing debt and place all of your loan payments into a single repayment schedule.

Beyond that, they can offer better terms including less frequent payments and lower rates.

Some people use “debt consolidation” and “refinancing” interchangeably, but they aren’t the same thing.

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