If you deal with institutions that only profit out of credit cards, chances are they won’t want you to consolidate your debt. Thus, you need to understand why full service banking is best for you and what are its advantages.
Credit card debt is one of the biggest financial issues Americans have to face every single day. The accumulated credit card debt of the average American adds up to $8000 and is the main cause of bad credit, delinquencies, default and eventually bankruptcy. In order to avoid this situation it is smart to count on the aid of financial institutions. Consolidating your debt with your bank will show them that you are willing to honor your obligations and thus, they will be more flexible.
Debt Consolidation Is Complex
Consolidating your credit card debt into the wrong kind of loan can cause you more travels than the solutions it may bring. You need to understand fully the consolidation process and the options available to you in order to make the right decision. Full service banking can make things easier because you won’t need to resort to a different lender like you need to do when you deal with credit card banks only.
There are full service banks that offer credit cards, checking and savings accounts, mortgage loans, personal loans, car loans, consolidation loans and many more. Most of these products get pre-approved when you hire their services and thus are immediately available once you request them. This is a great advantage because you don’t have to suffer those long credit verification processes. The bank knows exactly what your income is, how you spend it and so on.
Credit Card banks on the other hand, know only how you spend with their products and don’t offer additional financial products, thus, if you need to consolidate your credit card debt, you have to resort to other lenders that require credit verification and income proof which you may or may not pass. Thus, full services banks are always the best way to go.
Debt Consolidation Programs
Most banks debt consolidation programs are benevolent with their clients and agree with them longer repayment schedules so as to make things more bearable for them. In most cases debt consolidation is instrumented through a debt consolidation loan that is granted on condition of being used for repaying the client’s debt with the bank. In the long run, the bank profits from the operation because the longer repayment program guarantees repayment and higher amounts in terms of interests over the whole life of the loan.
The client on the other hand, gets relief for his budget as the monthly payments are a lot more affordable and he will have more income available for other expenses. The only drawback is that debt freedom will take a lot longer as the client is tied with a loan to the bank for a long period of time that can range between 2 to 30 years.
Sarah Dinkins is an Expert Loan Consultant at Badcreditfinancialexperts.com where she helps people to repair their credit and to get approved for home loans, unsecured personal loans, student loans, car loans and other types of loans and financial products. In her website you can find more finance articles.