Can You Have Two Debt Consolidation Loans | How It Works

Can You Have Two Debt Consolidation Loans

Are you allowed to consolidate multiple loans?

It is possible to consolidate two loans at once. However, it is important to weigh
the financial consequences.

We spent time recently discussing debt consolidation loans and how you can
reduce your debt to get rid of it. You might have wondered if you could get two
debt consolidation loans at the same time.

They offer many benefits to debtors.
You can consolidate two debts. However, just because you can afford it does not
mean that this is in your best financial interests. Let’s take a deeper look at debt
consolidation loans and their implications.

What is a consolidation loan for debt?

You can repay other lenders with a debt consolidation loan at a lower rate of
interest. The loan will pay off any unsecured debt. These are just a few
examples of debts.

Balances on credit cards

Medical treatment costs

Personal loans of other types

Student loans are possible, provided they aren’t secured
Unsecured debt refers to any type of debt that isn’t secured. If you have a
mortgage or a home equity loan, you are borrowing against the home’s worth.
If you default on a loan, or are late on payments, your lender may take your
collateral.

It could even take your home if you default on a loan or fall behind
on payments for HELs and mortgages. You cannot combine secured debt with
other debt. It is impossible to consolidate secured debts.

A debt consolidation loan illustration

Let’s take, for example, three credit card debts.

Card 1 has a balance in excess of $5,000 and a 17.5% interest rate.

Card number 2 has a balance of $10,000 and a 16% interest.

Card number three has $3,000 remaining and a 22 Percent APR.

$18,000 in credit card debt The loan will be paid back in 36 months at a rate
5%.

The $18,000 you borrowed will be used to pay off your credit card debts
quickly. You will repay the loan at a rate of 5%. You can save money by
refinancing to a lower rate of interest over the long-term.

The loan can be repaid over 36 months. Each month, you must make at least one
payment. These are the minimum monthly payments. You may be able pay more
to expedite the process but you cannot pay less to avoid penalties.

Two debt consolidation loans can you get at once?

Let’s take our previous example one step further. You and your husband owe
$12,000 each for medical expenses. The collectors have sent you invoices which
must be paid immediately. You have considered debt settlement options but are
now concerned about the long-term impact on your finances as well as your
credit score.

Instead of taking out a $24,000 personal consolidation loans to pay for your
medical bills, you can instead take out a $24,000 loan. You now have two
outstanding debt consolidation loans balances: one for $18,000 and one for
$24,000.

Your financial situation will influence your decision. Fixed-rate debt
consolidation may result in lower monthly payment and easier budgeting. It will
give you an exact idea of your monthly loan payment and will eliminate the
need to worry about interest accumulation.

Before you decide whether an additional consolidated loan is right to meet your
needs, there are several things you need to consider.
Each month, payment are made.

You may be asking, “Can I get two consolidation loans?” It is important to
consider your ability to repay it.

The above example shows you taking out two loans, one $18,000, and one
$24,000. Although you are using the money to reduce debt, it will create
$42,000 of new debt which must be paid within a certain time period.

A low interest rate can save you money over the long-term but you must be able
to afford your monthly payments.
Your credit score will be affected in the short-term.
Your credit history will be checked by your lender before you can apply for a
loan. Your credit history will be thoroughly investigated. This applies to all
debtors.

A credit inquiry can temporarily lower your credit score. You can establish
excellent credit quickly if you pay your bills on time. This will help you reduce
overall debt.

Eligibility

If you consolidate debts, your second loan might not be eligible. A personal
mortgage will usually be approved for those with less than average credit.

You should not apply for a second loan if you have not made your previous
payments on schedule. If you have defaulted on a previous consolidation loan,
lenders might not be willing to lend to you again.

The loan charges

Consolidating your debt may result in fees. They will most likely have been
paid once for the original loan. Your lender may charge fees that are different
from what you have paid before.

Annual fees will be charged

Closing costs

Transfers of balances are subject to fees

A loan can be obtained for a fee.

If you pay your loan off early, you may be charged additional fees. You might
not be eligible to repay your loan within the timeframe you have agreed to. You
might not be eligible to repay a 36-month loan within 18 months.

Benefits exempted from tax

For certain interest payments, such as student loans interest, tax deductions
might be possible. If you consolidate your debt, these benefits will be lost. The
IRS states that interest payments on personal loans are not generally tax-
deductible. It is possible that you will end up paying more.

What other options are there for debt consolidation loans?

If you aren’t convinced that a second consolidation loan to pay off debt is the
best choice, there are many other options. These are some of them:
Negotiating with your lender in order to create a debt management program.

Settlement of debts

Credit cards for balance transfer Another option is Consolidationnow. This is a credit card payment plan similar to
Consolidationnow. Consolidationnow makes it easy to pay your credit cards in the most efficient way
each month.

Consolidationnow won’t forget to pay your bills promptly, which can help you
maintain excellent credit with your credit card provider. All uncertainty
surrounding the payment of credit card debt is eliminated by Consolidationnow.

Are you looking to consolidate two debts?

It is possible to consolidate two loans. There are no restrictions on the ability to
start a new business. You will need to find another lender willing to lend you
another loan.

Additionally, borrowing a second loan to consolidate debt may have financial
consequences. While you may be taking on substantial debt, the interest rates
are lower. You could lose tax benefits or end up owing more fees for your
actions. Credit scores will likely be affected in the short-term.

Consolidationnow is a good option if you don’t require a second loan consolidation. By
paying your credit cards on time and efficiently, Consolidationnow may help you get rid of
debt.