Managing your finances well is the most important part of adulting, from budgeting your everyday necessities to figuring out how to pay off your debts on time. One of the situations that can arise in this process is that you end up with multiple loans to pay every month, which is quite a handful. 

In my experience, the aim is always to lessen the expenses and streamline the payoff. This will help you achieve two things: Repay your debt early and keep your credit score high for future loans. But what type of consolidation loan should you get if you already have high-interest loans to work through?

Well, there are several types you can choose from, and I will walk you through them so you know what to ask from your debt consolidation company. 

• Personal loans

This is arguably the most common type of consolidated debt that you can take. In my opinion, this can be one of the best ways to pay off your debts through a single interest rate. With a personal loan, these rates can be quite low. Further, banks and lenders often give you the entire amount through a lump sum that you can pay off through EMI or equated monthly installments.

• Loan against property

Building equity over the years allows you to get consolidated debt as a loan against property. These are usually secured loans that require you to put up collateral. Let me explain what it means. To put up collateral means keeping an asset at stake in case you cannot pay off your debts on time or default. This can be a vehicle, a plot of land, or any other property. 

• Credit card loan

This is another excellent way to get consolidated debt in a new balance transfer account. While it can temporarily knock your credit score down, you can get reasonable interest rates for specific types of cards. Credit cards come with their own perks and benefits based on factors such as the income bracket and the demographic they are aimed at. Some cards offer lower interest rates than others based on their features and the minimum balance that you are required to keep. Further, there are often promotional periods for cards that can help lower your fees and other interests. 

• Student loans

Another strategy for debt consolidation is to draw a student loan. You can get special loan offers if you’re currently pursuing your education. This can happen in a couple of ways. If you stretch out the period for your loan repayment to one that is longer, you can have your interest rate lowered to a more manageable amount. However, this means it will take longer for you to repay your entire debt. Further, you will have to pay a greater amount over time. Nevertheless, it will be more manageable. 

Wrapping up

Remember, the main purpose of drawing debt consolidation is to gain lower rates and be able to pay off all your loans through that singular interest. That’s why, when choosing the type of loan you take out for a balance transfer account, it’s best to look for ones that can reduce your overall expenses or at least make them more manageable. 

Hopefully, with the above-stated pointers, you can get an idea of how to approach your debt consolidation company with the right type of loan that works to reduce your financial burdens and not add to them.

In my experience, in-depth research will help you find the best debt consolidation company that can offer you the right type of loan in this regard.