How a Debt Consolidation Loan helped Me get a New Car
Tamara Jones needed a new car. She had been driving her old one for 8 years, and she had bought it used from a friend of a friend. While she was always careful about maintenance, her mechanic had told her that the car’s engine would need to be replaced, at a cost of over $4000. Her best option was to just buy a new car.
Unfortunately, Tamara didn’t have the money to buy a new car. She barely had enough money each month to pay her bills. She knew she would have to get a car loan, but she just didn’t know where the money to pay the loan would come from.
Tamara decided to get a debt consolidation loan. These loans pay off all of a person’s existing debt, then replace it with a new loan. The new loan has a lower interest rate and better payment terms, making it possible for a borrower to pay a lot less every month.
In Tamara’s case, she was able to combine several credit cards, a payday loan, and some medical debt that she was still making payments on from an operation she had a few years back. She worked with a debt counselor to find a new debt consolidation loan that would enable her to pay hundreds less every month towards her debt. With a lower interest rate on the new loan, she also knew that more of her money was going to pay off the debt, not to paying interest to a bank.
With the hundreds of dollars a month she saved from the debt consolidation loan, Tamara was able to afford a new car. The debt consolidation loan also helped her raise her credit score slightly, enabling her to qualify for a loan with a better interest rate. She was able to buy a new car, and now she no longer worries about breaking down on her way to work. Since her new car gets better gas mileage, she’s taking the money she saves on gas and maintenance and putting it towards paying off her car loan faster. Soon, she’ll be completely debt free on on her way to building up her savings.