A debt consolidation loan is a workable way of merging all your scattered loans into a single one. This way, you can use the money from the new loan to pay off your previous debts. A study from Lending Tree revealed that a majority of high-score borrowers – 39.7% took personal loans to consolidate their debts. However, though this approach sounds practical, there are several myths and preconceived notions about the same.

To give you a better analysis of debt consolidation, we have debunked myths surrounding debt consolidation.

Myth 1: Debt consolidation will affect your credit score.

Opting for a personal loan for debt consolidation will indeed impact your credit score in the initial phase, but not in the long run. Just like other debt solutions, your credit score will come down a bit with debt consolidation but it is temporary. As you keep on paying your new payments on time, your credit score will keep on improving.

Myth 2: Debt consolidation will push you to move toward debt

This is a common myth associated with debt consolidation. Getting trapped in debt depends on how well you can spend your money. You can take the help of a budgeting service to can have a robust budgeting system. This will help you in becoming wiser with your spending. Debt consolidation will ease your repayment process and prevent you from falling behind in paying debts on time. It does not have any role in pushing you towards more debt.

Myth 3: Debt consolidation means paying low interest

It is a common misconception revolving around debt consolidation. While the majority believes that paying interest for a single loan results in lower interest than paying multiple debts, the truth is it depends. Most of the leaders will have a look into your credit score before suggesting a suitable interest rate for you. If your credit score is higher, you can enjoy the benefits of low-interest rates while bad score can cost you a high-interest rate.

Myth 4: Seeking debt consolidation with a poor credit score is impossible.

This is not at all true. If you are having a bad credit score, debt consolidation is the best debt management solution for you. If you are struggling to repay multiple debts you are at risk of dipping credit scores. That’s precisely where debt consolidation will help you. Debt consolidation is the most suitable option open to people with poor credit scores. So, if you are from Calgary, Edmonton, Lloydminster, and Alberta and want to manage your patchy credit history, debt consolidation is one of the best options.

In conclusion

If you are looking for debt consolidation in Calgary, Alberta, Edmonton, and Lloydminster, Credit720 is your go-to place. Credit720 is committed to helping people in managing their finances and get out of debt in a planned manner. If you or your near and dear ones are facing struggles in paying debt, you can always count on us. Our friendly and knowledgeable professionals are always ready to assist you to get out of debt.