How Do Consolidation Loans Work?

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Consolidation loans are offered by banks to consumers who have gotten into debt. They allow the consumer to pay one bill instead of several different credit card bills. Consolidate debt with a bank loan using advice from a registered financial consultant in this free video on money management.

Part of the Video Series: Money Management
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Video Transcript

This is financial advisor, Patrick Munro. In today's modern life in America a lot of consumers get involved in many things at one time when it comes to financial services, and bills start to pile up. Pretty soon, folks are facing more bills than than there is money at the end of the month, so consolidation loans come into sharp focus at that time. You can present yourself to your retail bank if you run into a situation where you have too many bills, and a bank will offer you a consolidation loan only if you have worthy credit and have not gone too far over where there's just no hope for you, and you don't have enough money to even service a consolidation loan. But really, what they will do is bill by bill by bill they will pay these balances off to zero, which means you will now have one large loan. However, you can lower the interest rate, and the the term of the money based on the amount of time that you pay off your consolidation loan which is anywhere from twenty four to sixty months. So, this is Patrick Munro talking about the benefits of consolidation loans.

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