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How To Get The Most Out Of Discover Debt Consolidation?

March 26, 2020 By Susan Paige Leave a Comment

Are you struggling to keep track of all the debts you are paying back? If so, you’re not alone. Most Americans are in debt, and a big proportion of them have multiple debts. The average homeowner will have a mortgage, at least one credit card, a car loan, and any other loans they have taken out over the years through necessity.

This common reality has led to the success of debt consolidation services. Debt consolidation loans pay off all of your debts and turn them into one lump payment. Rather than paying each off individually, having to keep track of different interest rates and payment dates as well as the status of the debt, the debt consolidation loan takes all of your debt on for you.

The advantage is not just convenience. Debt consolidation also gives you a new, more manageable interest rate on the lump sum, so that high-interest loans you took in desperation no longer burden you. High-interest loans are responsible for the debt cycle of many Americans, who simply cannot pay back their loans as fast as the interest accrues.

Discover is a popular debt consolidation company. With a Discover debt consolidation loan, you can get a grip on every loan you’ve ever taken out and start working your way towards being debt-free.

Here’s what you need to know to get the most out of a Discover consolidation loan.

Do you qualify?

We need to start with the basics – do you qualify? If not, none of this information will help you. Discover has the following criteria. You need to:

  • be an American citizen or legal permanent resident
  • be 18 or over
  • have a credit score of 660 or more

In addition, it helps if you have multiple credit cards and other commitments.

Ultimately, the factor most likely to disqualify you is your credit score. A credit score of 660 is relatively good, so if you have a long history of not paying back loans or credit cards, Discover will not grant you consolidation.

If you do qualify, you can start to gain the benefits of Discover debt consolidation.

Improving interest rates

One of the great features of a Discover debt consolidation loan is that your interest rate can gradually improve. Your initial interest rate is calculated based on your credit score and financial history. It will be between 6.99% to 24.99%. Regular payments on your Discover loan can improve your credit score. As your credit score improves, Discover will reevaluate your interest rate and it will get gradually lower.

Instead of being stuck with high interest rates of ill-informed loans, you get a reasonable rate which you can work on improving.

No fees or penalties

Discover does not ask for any origination fees and will get you set up on a payment plan that suits your abilities. However, if you are able to pay it off early, you will face no penalties. So if your business takes off or you come into an inheritance, you can cancel all your debt at once without losing out.

Financial education tools

The best thing about Discover is that it does not act like other loan companies. It is not predatory and clients have good things to say about it. Rather than pressuring you into taking on more debt, Discover gives you the best options to get rid of your debt as quickly and cheaply as possible.

Part of this ethos comes through in the resources Discover makes available to help clients with financial education. They will help you engage in better money practices so that as you pay off your debt, you don’t accrue any more.

What debts should I consolidate?

There are a number of different kinds of debts that most people use debt consolidation loans to pay. One of the most common is credit card debt. Credit cards are so easily accessible – you don’t need to have any credit history – that just about everyone has credit card debt. Some people are able to manage it, but for others it consistently grows. Debt consolidation will pay off debt from multiple credit cards.

Many Americans are also saddled with student debt. Depending on how much you are earning, you may be paying off student debt for fifteen years or more. Debt consolidation will take care of your student debt, making it part of a lump sum. However, if you have a low interest rate provided by the government, you may be better off continuing to pay it off yourself.

You may also have multiple personal loans you have taken out at various times to deal with ad hoc expenses. Personal loans that are sought in times of urgency often come with massive interest rates. Using debt consolidation, you can get a much more manageable interest rate to deal with.

Discover debt consolidation is not for everyone. But if you have a good credit score, it can help you get all your debts under control with a manageable interest rate.

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