Do you have multiple credit cards and loans? Are you struggling with your repayments? Or are you feeling like you are drowning in debt?
Then we have a solution for you to ease your worry.
High salary and the expensive lifestyle always welcome credit cards and loans to our life. Most of us obtain credit cards on the premise that we shall us them only in urgent situations or some of us took them to pay another loan. But your hidden money eater is the high-interest rate.
Whenever we take loans from the bank or spend on credit cards, we always make a plan in mind, about how to repay it. Sometimes our need may be an emergency, so we don’t even think of high-interest rates or repayments; all we need is money for passing that moment.
With regards to the repayments, we may miss the deadlines while coping up with the day to day expenses and loan repayments hand in hand making it a burden. And when all your loans come to you at different dates of a month and dividing your salary among them will surely drive you nuts.
How about if all your debts come under one roof? That too, with a lesser interest rate? There comes the importance of debt consolidation. It turns like a low-interest personal loan with a more extended repayment schedule or a repayment term of your convenience.
If you are a UAE national, and your debts are crossing more than 50% of your monthly income, some banks allow for flexible repayment for up to 144 months. For expats also, some banks are offering up to AED 1 million as a consolidated loan, under specific terms and conditions.
When you do not have a continuous source of income or you are unemployed, handling debts may become a nightmare. The Collection calls and legal consequences of non-payment create havoc leaving most of trapped every day. When you approach your bank, debt consolidation is the first step banks may suggest to you. They will ask for a nominal payment and freeze your debts until you find a new job.
A bad credit means, you are left with a considerable amount to pay back to your debtors even after having a continuous source of income. At this stage, the debt consolidation will be with a higher interest rate and can turn to a bane than a boon. A low credit score is also a reason for denying debt consolidation.
Debt consolidation is a good option when you have a good source of income and want to clear your debts altogether as soon as possible.
In short, debt consolidation entirely depends on the provider. Also, the interest rates and their requirements for permitting can be different from other service providers or banks.