Loan consolidation is an option if you want to replace your multiple loans with just one personal loan. You could decide to consolidate your credit card, personal loan, and other unsecured debts. The main advantage of doing so is that you could significantly reduce interest rates.

Through loan consolidation, you could finally avoid the requirement to make separate repayments for all your unsecured loans. Consequently, you would repay a more affordable monthly due. It is quite logical that through such a loan, monthly expenses for meeting debt obligations could be significantly minimised.

Costs, rates, and repayment schedules

To illustrate, suppose you have multiple personal loans and debts from your credit cards with a combined $10,000 outstanding balance. With the current rates and outstanding minimum repayment requirements imposed by most lenders, you would be required to shoulder a combined minimum repayment of about $466 a month over two years. Through a long-term loan consolidation of about 10 years, the minimum repayment amount would be significantly lowered to just $137.

There are options when it comes to interest rates applied. Loan consolidation products could impose a variable or a fixed rate. Variable rate would allow you to be more flexible when making additional repayments. That means you could opt to pay more than how much you are required to pay in a month at no additional cost. This is advantageous if you want to end the loan faster or before its scheduled maturity. Fixed interest rate requires you to stick to a single amount of loan repayment in a month throughout the entire loan duration.

You could have options when it comes to repayment schedules. You could opt to make loan consolidation payments on a weekly or monthly basis. You also get to decide the duration or length of the loan. This way, you could make sure your loan consolidation and the monthly repayment required would meet your specific needs and payment capabilities. Most lenders provide loan consolidation products that last from as short as a year to as long as 7 years.

Security, fees, and loan

Most loan consolidation products throughout the country are unsecured loans. Thus, you would not be required to secure them. That means you could apply for and obtain such loans even if you do not own a property to be used as collateral or security. As for fees, loan consolidation products usually do not collect early repayment or ongoing fees. But most of those loans charge establishment fees, which are minimal.

Experts advise consumers to be more careful when considering loan consolidation. You should fully understand available options before taking one. It should always be your goal to save on costs and to obtain lower interest rates than how much is currently applied to your existing loans. Carefully read and understand the loan terms and conditions so any hidden costs and fees would not be missed. You should also be informed about possible implications of consolidating loans. In the end, you should aim to finally manage your debts effectively as you take loan consolidation.

Creating a Frugal Budget

Almost all of us now, are looking for ways on how to save money in any manner. A financial problem arises in every part the world. Why not give frugal lifestyle a shot?

Achieving a frugal living goal should start with a frugal budget.

Here’s how to create a frugal budget:

Sum up your total earnings

Total all the money that you make monthly, including your part time, proceeds from business and other forms of residual income.

Sum up your total expenses

Gather all your monthly bills, and list down all the expenses that you make monthly including those eat out, movie watching and hobbies that you spend money.

Subtract your expense from the earnings

This will help you find out whether you are spending way more than what you are earning. This will also determine if how much is left at the end of each month.

Budget restructuring

If you find out that you are spending more than enough, restructure your budget. Go over your expenses and see where you can