Benefits to consolidating debt
Federal student loan consolidation is often referred to as refinancing, which is incorrect because the loan rates are not changed, merely locked in.
Unlike private sector debt consolidation, student loan consolidation does not incur any fees for the borrower; private companies make money on student loan consolidation by reaping subsidies from the federal government.
Lenders have fixed costs to process payments and repayment can spread out over a larger period.
However, such consolidation loans have costs: fees, interest, and "points" where one point equals to one percent of the amount borrowed.
Personal loans comprise another form of debt consolidation loan.
Individuals can issue debtors a personal loan that satisfies the outstanding debt and creates a new one on their own terms.
In some countries, these loans may provide certain tax advantages.
Because they are secured, a lender can attempt to seize property if the borrower goes into default.
We do not base the decision solely on credit score.
This has caused the Asian nation to take harsher steps when it comes to lending determinations.