If you have a large debt burden and the responsibility of caring for a young family, you probably feel the weight of your debt more than others. After all, it can be hard to stay on top of your bills and ensure your children have everything they need without going more and more into debt with each passing day.
The good news is that if you're ready to conquer your debt, there are a variety of ways to ensure you pay it off once and for all. One of those options is getting a personal loan which is great for people who have a significant amount of debt from different lenders at varying interest rates.
The way it works is that once you apply for and are approved for a personal loan for the amount of debt you currently have, your personal loan lender will pay off all of your debts for you and roll them into a new, larger loan at one interest rate that you will be responsible to pay each month.
If this sounds like something that would be a good fit for your particular financial situation, here's how to get a personal loan the right way:
Many people know they're in debt but they don't know the actual number. According to a study by the Pew Charitable Trust, 8 in 10 Americans have debt, so this is a problem felt far and wide in our country. In order to get out of debt, you have to be as informed as possible. So, the first step is to get a credit report. Your credit report will list all current debts from all current lenders. You should take each one of these debts and write them down along with their interest rates. The interest rate will be important to know for step two, which is applying for a personal loan.
Apply for a Personal Loan
You should be aware that consolidating your debt into a personal loan does not reduce the amount of debt you have. It's merely a tool to help you get out of debt faster because you can consolidate everything in one easy to remember payment at a (hopefully) lower interest rate.
The reason you wrote down all of your interest rates is to ensure you don't take a loan with a higher interest rate than you currently have. Interest rates are so important for getting out of debt because the less interest you have to pay, the more money you can put towards your principle to reduce the debt.
Another tip is to not take the first personal loan that you are offered. Shop around to get quotes from numerous different financial institutions. Compare all of your offers and then go with the absolute best one. The rate you get for your personal loan will depend on your credit score and overall credit worthiness, so if you have any adverse accounts on your credit report, try to get current on your debt before applying for a personal loan to show that you are a responsible borrower.
Aggressively Pay it Off
Now that you've secured a personal loan and rolled all of your debt payments into one larger loan with one interest rate and one payment each month, it's time to aggressively pay it off. In order to do that you have to get extremely motivated and intense. Sell excess items in your house. Take an extra job. Start your own side business. The faster you pay it off, the quicker you can enjoy the benefits of being debt free. That will not only put you in a better financial position personally but it can drastically improve your family life in the future and give you a life free from the stress of being in debt.