Debt consolidation is a financial strategy that combines multiple debts into a single loan or payment.
What are the benefits of debt consolidation?
Saving on interest payments. The primary benefit of debt consolidation is saving on interest costs. Long-term debt with a high interest rate can cost thousands of dollars in interest payments over the life of the loan. That’s money you may not need to pay! Moving that debt to a new loan or line of credit with a lower interest rate, or sometimes no interest rate at all, can translate into significant savings. Use our calculator to see just how much you can save.
Simplified payments that can help pay back debt faster. With only one monthly payment to make, managing your debt will be a lot easier.
Fixed payment timeline. Debt consolidation often means having a fixed payment timeline. This makes budgeting easier and allows you to make long-term financial goals, with a fixed date for when you will be debt-free.
Boost your credit score. If you’ve been falling behind on your monthly payments, moving your multiple debts to a single low-interest loan can help to boost your score. By consolidating multiple payments down to one, paying on time and regularly becomes more manageable.
How can I consolidate my debt?
Consolidating debt may seem overwhelming; the good news is there are several ways to do so. For personalized guidance on which option may work best for you, consider meeting with a financial counselor. Most credit unions offer financial counseling, including MSGCU. It’s free to meet with one of our financial counselors and there’s one available at every branch office.
1. Personal loan. Taking out a personal loan will enable you to pay off all your outstanding loans immediately and move your debts into one low-interest loan. MSGCU offers personal loan options with no application fees and interest rates as low as 9.50% APR*.
2. Home Equity or HELOC loans. A home equity loan or home equity line of credit (HELOC) uses your home as collateral for an open line of credit or a fixed-term loan. As secured debt, interest on these loans can be affordable and may provide you with significant savings. Interest on home equity loan products is often tax-deductible as well. MSGCU offers both Home Equity and HELOC loans with no application fee.
3. Balance transfer. Moving your debt to a new credit card with a low interest rate or a zero-interest offer can be a great way to pay down debt Now until June 30, MSGCU is offering a 3.99% APR** promotional rate on balance transfers to our Rewards, Titanium, and Classic cards. There is no transfer fee, no minimum or maximum to transfer, and when your 6-month promotional period has ended, you’ll still get a great low rate on your MSGCU Visa card.
If you’re ready to consolidate your debt, we can help! Call, make an appointment at one of our 22 branches, or video bank from the comfort of your home to discuss your options.
*APR = Annual Percentage Rate. Initial rate may change. Variable-rate loan may change quarterly based on the Wall Street Journal Prime Rate. Maximum APR is 18.00%. Contact Member Service Representative for more details.
**3.99% APR for 6 months on balance transfers only. Interest will begin accruing from the time of the transfer. No balance transfer fees. Members can make multiple transfers up to available credit limit. One balance transfer allowed per card. Standard APR applies beginning 6 months from date of the first balance transfer. Eligible on Titanium Visa Credit Card, Rewards Visa Credit Card, and Classic Visa Credit Card. Available to new and existing MSGCU cardholders. No minimum or maximum transfer amount is required. Transfer up to available credit limit. Offer valid 1/6/2025-6/30/2025.
Category: Finance
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