Tips About Fixed Rate Debt Consolidation Loans and How They Work
Fixed rate debt consolidation loans are the loans that you want to have when you consolidate your debt. Fixed rate means that the annual percentage rate (APR) is fixed at for a certain number of years, with a set payment.
Here is an example of this. Let’s say that consolidated $10,000 of debt at 10% interest per year for 48 months with a payment of $255 a month.
Essentially, the breakdown of the debt would look like this.
Consolidated Debt = $10,000
Annual Percentage Rate (APR) = 10%
Term = 48 months
Payment = $255 a month
The payment and the interest rate will not change because you signed for a fixed loan. Beginning to make sense now? The fixed rate loans are among the most popular loans that banks have to offer. The credit card loans are the next most popular loans.
Can you guess which type of loans that banks give to people that have a fixed rate? If your guess was mortgages, then you are right. As you can see from the previous example above, a mortgage loan would look almost the same. A mortgage would have slight differences such as the interest would be cheaper, the amount of years, and the payment would also be different. Not to mention that the loans would be much higher as well.
Therefore you are looking for fixed rate debt consolidation loans talk to your local bank about the current loans that they have and shop around after that to see which loan would benefit you in your situation.
Need more information about unsecured debt consolidation loans and what to do with them?
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