Consolidate Your Holiday Debts into a Short-Term Installment Loan

Are you still paying off debts from the holidays? It is easy to spend more than you intend over the Christmas and New Year period. Just as you start to get ahead of the bills, Valentines Day creeps up on you and your back struggling to make your payments.

Gifts, food, parties, family celebrations and many other expenses often lead to higher debts. Should you convert all or most of these debts into a short-term installment loan lasting just three or four months? Here are some advantages of doing so.

Benefit From One Fixed Interest Rate

If you have several different repayments to make each month, it is likely that you will pay a different rate of interest on each one. If you consolidate all of your debts into a single installment loan, you will just pay one interest rate on the total amount owed.

You will save money on interest payments if the interest rate on the installment loan is lower than the combined rate on all your other payments.

A further advantage of taking out an installment loan is that your interest rate will be fixed for the whole of the loan period. This means that you will not be at the mercy of variable interest rates, which can be the case for other forms of credit including credit cards.

Improve Your Credit Score

If you consolidate your holiday debts into an installment loan and then make all your loan repayments in full and on time, your lender will report this to the credit bureaus and it should have a beneficial effect on your credit score.

If, however, you keep your debts separate, you will have to remember to make several different payments each month. If you forget to make one or more of these payments on time, your late payment(s) will be reported to the credit bureaus and could have a detrimental effect on your credit score.

Budget More Easily

If you take out an installment loan, you will know exactly how much your monthly loan repayment will be and its due date. It will then be much easier to budget for this single payment than if you had to make several payments of different amounts on different due dates. Having a single monthly loan repayment that does not change from month to month makes managing your money much more straightforward.

 Pay Off Your Debts More Quickly

When you take out a three-month or four-month installment loan, you can rest assured that all your holiday-related debts will be paid off at the end of the loan period as long as you make each of the monthly repayments on time.

If, however, you decide to pay off each of your debts separately, it may take longer to repay the total amount owed as you juggle different payments at different interest rates due on different dates of each month.

A three-month or four-month installment loan is a very easy and convenient way of consolidating your holiday debts. After just three or four equal monthly repayments at a fixed interest rate, you will have repaid all your holiday debts without financial juggling or worries about interest rate rises. It is also likely that your credit score will have improved.

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