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Consumer Tips

Why Consolidating Debt Can Save You Time and Money

Do you have several credit cards that you’ve acquired over time, each with its own interest rate, payment due date and balance?  Have you ever considered a loan for debt consolidation?  


These loans are a good option for people looking to decrease their number of monthly payments, lower their interest rates and achieve a less-stressful financial future.  Here are a few commonly asked questions that might help you determine if a debt consolidation loan is the right option for you.  

What is the difference between a secured loan and an unsecured loan?

Secured loans, such as a mortgage or car loan, require you to put collateral down to cover the repayment of the loan if you are unable to make your monthly payments. Unlike a secured loan, an unsecured loan doesn’t require collateral, making it a good solution for those looking to consolidate debt quickly and easily. 

Should I pick a fixed rate or a variable rate loan?

A variable rate, like most credit cards, is one that is likely to change (increase) over time, causing your monthly payments to also increase. You may receive a lower rate with a variable rate loan, but because it is not guaranteed to remain the same over time, it’s a potentially riskier option. 

A fixed rate is one that will remain the same for the term of the loan. With a fixed rate, you won’t have to worry or wonder if your rate might go up – and that means you’ll always know exactly how much your monthly payment is.  No surprises.  

How long will it take to pay an unsecured loan off?

Unlike credit cards, loans have a pre-determined length of repayment. This means that you know exactly when your loan is paid off and when you’ll be out of debt. You usually have the flexibility of determining the length of repayment based on monthly payment options. Most lenders allow you to choose the due date of your monthly payment so you can prioritize bills to fit your budget.

Are there fees associated with an unsecured debt consolidation loan?

Some lenders charge an origination fee that can range from 3-6% (or more) of the loan amount you consolidate. For example, a $15,000 loan with a 5% origination fee would result in a $750 origination fee, in addition to your loan amount. Loans without origination fees allow you to save on upfront costs.

Unlike many credit cards, most loans do not charge an annual fee. This allows for even more savings when consolidating credit cards into an unsecured loan.

Is an unsecured loan right for me?

A loan can help you consolidate revolving debts so that you can have flexibility in your budget and achieve your financial goals. They are a good option for people who want to find a solution for outstanding debt and stop wasting money on higher-interest credit card balances. When applying, lenders will review your credit history and look for things such as bankruptcy and on-time payment history.  Qualification will vary based on the lender you choose.

Does Union Plus have a solution for me?

Yes!  If you’re interested in an unsecured loan, click here to learn more or apply for the Union Plus®Personal Loan so you can start saving time and money today!