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It is already difficult to be a single parent, but if you get in debt due to the expenses you incur in it gets even more stressful. However, it is always possible to solve those unavoidable problems by consolidating all your debt into a single loan with lower and more affordable monthly payments.
Those facing a divorce and those who have lost their loved one know exactly how difficult it is to cope with the economic as well as psychological problems that these events cause. But not only debt accumulates, this also has consequences on your credit report as it will drop your credit score significantly.
Accumulated Debt
An average American has between $8000 and $12000 in credit card debt. Store card debt may be included or not, if included the average raises up to $15000. An additional problem is that debt is spread between more than 8 different financial products, consequently having to remember at least 8 different due dates. Even if you can get the money for at least the minimum payments, it is not strange to see people forgetting to pay one of their bills or credit card balances due to the multiplicity and complexity of this debt repayment.
The problem aggravates because the average American is not a single parent. A single parent has equal responsibilities and less income and spare time. Thus, late payments and missed payments are significantly more frequent. This makes that single parents have comparatively lower credit scores and thus, more difficulties in getting finance than non parents or couples.
Consolidation Loans
Debt Consolidation loans come as a solution for single parents. The idea is that by obtaining a consolidation loan you can use the money to repay all your current and outstanding debt so you end up with a single loan, with single and lower monthly payments you’ll be able to afford without much hassles.
The amount of interests you’ll have to pay will be significantly lower and thus, in a longer period time spam, your average debt will be lower. However, what’s more important is that the monthly payments will let you make ends meet without sacrifices and you may even save some extra money for repaying your debt sooner. Thus, debt-freedom won’t be so far away.
The average interest rate you pay on multiple credit cards is around 20%. Instead, the interest rate for consolidation loans doesn’t exceed 10% if the loan is secured (home equity debt consolidation loans) and 14% if the loan is unsecured. As you can see, you can easily cut by half the amount you pay on interests just by consolidating your debt.
If you have difficulties obtaining a loan you may want to try seeking the aid of a co-signer, parents or other relatives can help. Collateral always boosts your chances of getting approved. However, if you can’t do either, you can always resort to bad credit consolidation loans or to transfer the balance of your credit cards to another credit card with a 0% APR promotional period. However, this last resort should only be used if you know you can repay your debt before the promotional period ends. Otherwise higher rates may apply and turn the transaction into more onerous.
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