OPEN AN ACCOUNT
  • Open An Account
  • Contact Us
  • Login
  • Open An Account
  • Contact Us
  • Login
Camino Federal Credit Union new logo - See the New Look - New Logo Camino Federal Credit Union new logo - See the New Look - New Logo
  • Accounts
    • Checking
      • Elite Checking
      • Everyday Checking
      • Student Checking
      • Digital Wallet
      • Apple Watch
    • Savings
      • Membership Savings
      • Money Market Account
      • Certificate Accounts
      • Certificate Promotion
      • Refer A Friend
      • Individual Retirement Accounts (IRAs)
      • Summer Salary Savings
      • Christmas Club
      • Student Savings
      • Children’s Savings
    • Credit Cards
      • Visa® Platinum with Rewards
      • Visa® Platinum with Low Variable Rate
      • Getting Started Visa®
      • Visa® Share-Secure
    • Rates
      • Auto Loans Rates
      • Bank Account Rates
      • Credit Cards Rates
      • General Loans Rates
      • Home Loans Rates
  • Loans
    • Auto Loans
      • Nearly New Auto Refinancing
      • New & Used Auto Loans
      • First Time Auto Loan Program
      • Second Chance Auto Loan Program
      • Lease Buy Out
      • Recreational Vehicle Loans
      • Motorcycle Loans
    • Personal
      • Credit Cards
        • Visa® Platinum with Rewards
        • Visa® Platinum with Low Variable Rate
        • Getting Started Visa®
        • Visa® Share-Secure
      • Share-Secure Loans
      • Personal Loans
      • Debt Consolidation Loans
      • Line of Credit
      • Furlough Loans
      • Smart Option Student Loan
    • Home Equity
      • Home Equity Loans
      • Home Equity Lines of Credit
    • Mortgages
      • Home Mortgages
      • Mortgages for Investment Properties
    • Rates
      • Auto Loans Rates
      • Credit Cards Rates
      • Bank Account Rates
      • General Loans Rates
      • Home Loans Rates
    • All Loans
  • Services
    • Online/Mobile Banking
      • Online Banking
      • Mobile Banking
      • Bill Pay
      • eStatements
      • Text Banking
      • Forms and Documents
    • Services
      • Surcharge-Free ATM Network
      • Shared Branching
      • Insurance Options from TruStage
      • Auto Buying Services
      • Telephone Banking
      • Additional Services
    • Lost or Stolen Card
    • Camino Workshop Series
    • Repay
    • Rates
      • Auto Loans Rates
      • Bank Account Rates
      • Credit Cards Rates
      • General Loans Rates
      • Home Loans Rates
  • About
    • About Camino
    • Open An Account
    • Community and Events
    • Location
    • Holiday Schedule
    • Careers
    • News
    • Advisor Appointment Center
    • Lost or Stolen Card
    • Contact Us
  • Blog
  • Accounts
    • Checking
      • Elite Checking
      • Everyday Checking
      • Student Checking
      • Digital Wallet
      • Apple Watch
    • Savings
      • Membership Savings
      • Money Market Account
      • Certificate Accounts
      • Certificate Promotion
      • Refer A Friend
      • Individual Retirement Accounts (IRAs)
      • Summer Salary Savings
      • Christmas Club
      • Student Savings
      • Children’s Savings
    • Credit Cards
      • Visa® Platinum with Rewards
      • Visa® Platinum with Low Variable Rate
      • Getting Started Visa®
      • Visa® Share-Secure
    • Rates
      • Auto Loans Rates
      • Bank Account Rates
      • Credit Cards Rates
      • General Loans Rates
      • Home Loans Rates
  • Loans
    • Auto Loans
      • Nearly New Auto Refinancing
      • New & Used Auto Loans
      • First Time Auto Loan Program
      • Second Chance Auto Loan Program
      • Lease Buy Out
      • Recreational Vehicle Loans
      • Motorcycle Loans
    • Personal
      • Credit Cards
        • Visa® Platinum with Rewards
        • Visa® Platinum with Low Variable Rate
        • Getting Started Visa®
        • Visa® Share-Secure
      • Share-Secure Loans
      • Personal Loans
      • Debt Consolidation Loans
      • Line of Credit
      • Furlough Loans
      • Smart Option Student Loan
    • Home Equity
      • Home Equity Loans
      • Home Equity Lines of Credit
    • Mortgages
      • Home Mortgages
      • Mortgages for Investment Properties
    • Rates
      • Auto Loans Rates
      • Credit Cards Rates
      • Bank Account Rates
      • General Loans Rates
      • Home Loans Rates
    • All Loans
  • Services
    • Online/Mobile Banking
      • Online Banking
      • Mobile Banking
      • Bill Pay
      • eStatements
      • Text Banking
      • Forms and Documents
    • Services
      • Surcharge-Free ATM Network
      • Shared Branching
      • Insurance Options from TruStage
      • Auto Buying Services
      • Telephone Banking
      • Additional Services
    • Lost or Stolen Card
    • Camino Workshop Series
    • Repay
    • Rates
      • Auto Loans Rates
      • Bank Account Rates
      • Credit Cards Rates
      • General Loans Rates
      • Home Loans Rates
  • About
    • About Camino
    • Open An Account
    • Community and Events
    • Location
    • Holiday Schedule
    • Careers
    • News
    • Advisor Appointment Center
    • Lost or Stolen Card
    • Contact Us
  • Blog
Camino Federal Credit Union
Login
  • Accounts
    • Checking
      • Elite Checking
      • Everyday Checking
      • Student Checking
      • Digital Wallet
      • Apple Watch
    • Savings
      • Membership Savings
      • Money Market Account
      • Certificate Accounts
      • Certificate Promotion
      • Refer A Friend
      • Individual Retirement Accounts (IRAs)
      • Summer Salary Savings
      • Christmas Club
      • Student Savings
      • Children’s Savings
    • Credit Cards
      • Visa® Platinum with Rewards
      • Visa® Platinum with Low Variable Rate
      • Getting Started Visa®
      • Visa® Share-Secure
    • Rates
      • Auto Loans Rates
      • Bank Account Rates
      • Credit Cards Rates
      • General Loans Rates
      • Home Loans Rates
  • Loans
    • Auto Loans
      • Nearly New Auto Refinancing
      • New & Used Auto Loans
      • First Time Auto Loan Program
      • Second Chance Auto Loan Program
      • Lease Buy Out
      • Recreational Vehicle Loans
      • Motorcycle Loans
    • Personal
      • Credit Cards
        • Visa® Platinum with Rewards
        • Visa® Platinum with Low Variable Rate
        • Getting Started Visa®
        • Visa® Share-Secure
      • Share-Secure Loans
      • Personal Loans
      • Debt Consolidation Loans
      • Line of Credit
      • Furlough Loans
      • Smart Option Student Loan
    • Home Equity
      • Home Equity Loans
      • Home Equity Lines of Credit
    • Mortgages
      • Home Mortgages
      • Mortgages for Investment Properties
    • Rates
      • Auto Loans Rates
      • Credit Cards Rates
      • Bank Account Rates
      • General Loans Rates
      • Home Loans Rates
    • All Loans
  • Services
    • Online/Mobile Banking
      • Online Banking
      • Mobile Banking
      • Bill Pay
      • eStatements
      • Text Banking
      • Forms and Documents
    • Services
      • Surcharge-Free ATM Network
      • Shared Branching
      • Insurance Options from TruStage
      • Auto Buying Services
      • Telephone Banking
      • Additional Services
    • Lost or Stolen Card
    • Camino Workshop Series
    • Repay
    • Rates
      • Auto Loans Rates
      • Bank Account Rates
      • Credit Cards Rates
      • General Loans Rates
      • Home Loans Rates
  • About
    • About Camino
    • Open An Account
    • Community and Events
    • Location
    • Holiday Schedule
    • Careers
    • News
    • Advisor Appointment Center
    • Lost or Stolen Card
    • Contact Us
  • Blog
8 Nov 2023

What is Debt Consolidation?

by Camino | posted in: Debt Consolidation | 0

Are you having trouble juggling payments with different terms and due dates for several high-interest debts? You are not alone. But managing debt shouldn’t feel like a juggling act. If you feel like you’re falling behind even when you start to catch up on repaying debts, debt consolidation could be a great option for you.

Clicking this video will redirect you to YouTube.

At Camino Federal Credit Union, we have been serving Montebello since 1941 with local guidance and financial products tailored to each member’s needs and goals to help them regain control of their finances and build a bright financial future by consolidating high-interest debt. Learn more about this strategy from our blog.

What Is Debt Consolidation? 

Debt consolidation is a type of debt refinancing that involves taking out one loan to pay off several other existing debts. You can get different kinds of loans to consolidate debt depending on your circumstances, like home equity loans or personal loans.

With a debt consolidation loan, you apply for a loan for the amount you own on existing debts. If you receive approval, this loan will pay off those balances. In doing so, you combine multiple debts and debt payments into a single, manageable payment. 

What is Debt Consolidation? Debt consolidation is a great financial tool at your disposal that could help you pay off debt faster and save substantial money. Learn more from our blog.

What are the Benefits of Debt Consolidation?

Consolidating your debts could offer several benefits that can help you regain confidence and control of your finances. Different ways you can benefit from a debt consolidation loan include the following.

Minimizing Payments: 

Debt consolidation combines multiple outstanding debts into a single loan, which could reduce interest rates and payments and simplify virtually all aspects of your finances, like budgeting, for example.

Streamlining Repayment 

If you have a debt consolidation loan with a lower interest rate, we advise making extra payments with the savings, which helps repay your debt earlier while saving even more on interest in the long run. 

Getting a Fixed Repayment Schedule 

With debts from credit cards, for example, you do not usually have a set timeline for repayment. However, debt consolidation loans have fixed monthly payments with a clear timeline that has a pre-determined beginning and end so you can finally put this debt behind you. 

Lowering Your Interest Rate 

If your credit score has improved since applying for the loans or credit cards that put you in this position, you could also decrease your overall interest rate by consolidating debts into a single, low-interest loan, saving substantial money in the long run.  

Reducing Monthly Payments

When you consolidate debt with one of these loans, your overall monthly payment could also decrease because your future payments will be spread out over a new and possibly extended term. 

Improving Your Credit Score

Debt consolidation can positively affect your credit score. By reducing the chances of making a late payment or missing a payment entirely, you will be able to improve your credit score. Also, by paying off revolving lines of credit and bringing past-due accounts current, like credit cards, you could reduce the credit utilization rate (which should ideally be under 30%) on your credit report.

Camino Personal Loans

How Debt Consolidation Loans Work

Essentially, with debt consolidation, you are rolling all of your debt into one loan with several potential benefits that can help simplify and improve your financial situation. 

When using a personal loan for debt consolidation, or any debt consolidation loan for that matter, there is generally a process similar to applying for most loans:

  1. Make a list of your debts, outline the amounts paid, monthly payments, and interest rates, and add up your debts to determine how much you need to borrow. 
  2. Check your credit and fix any errors that could negatively affect your score.
  3. Gather your loan application documents, like pay stubs, W-2s, bank statements, and tax returns. 
  4. Shop around for great rates and terms and prequalify if possible.
  5. Submit your application to take out a new loan.
  6. Use the new loan to pay off your old debts.
  7. Pay off the new loan.

Who Qualifies for Debt Consolidation?

You must meet some eligibility criteria to qualify for consolidating your debt with this financing option. To qualify for debt consolidation, you should:

  • Be at least 18-years-old
  • Live in the United States
  • Have a credit score that qualifies you for lower rates
  • Have proof of income
  • Be financially stable. 

When Should You Consider Using Debt Consolidation?

Debt consolidation could be a great option, but you must be sure it is viable for you and your situation. For example, if your credit score isn’t high enough to qualify for a lower rate, it may not make sense. Consider consolidating your debt if:

  • You have a large amount of debt in the form of several high-interest loans. 
  • You expect to pay off your debt in the next five years.
  • Your credit is good enough to qualify for a 0% credit card or low-interest debt consolidation loan.
  • You make enough or have the financial stability to cover payments toward your debt.
  • You have plans to improve your financial habits if your debt is the result of overspending or financially irresponsible behavior to prevent future debt.
  • You have multiple monthly debt payments and want to simplify and expedite repayment with fixed, reduced monthly payments.

What Types of Debt Can I Consolidate? 

Debt is basically categorized into two groups when determining what you can and cannot combine using a debt consolidation loan: secured debt and unsecured debt. 

With secured debt, you receive something in exchange for the financing you use. In other words, you receive a house for a mortgage or a car for your auto loan. These items become collateral on the loan. With unsecured debt, however, you don’t have collateral.

Credit card debt, for example, is unsecured, and a credit card company extends a credit line in good faith based on your credit score. If you fail to pay back what you borrowed, they have to sue you in civil court and can’t repossess property to reclaim what you owe. 

Generally speaking, you can consolidate any type of unsecured debt, or debt without collateral, such as:

  • Credit card debt
  • Store cards
  • Gas cards
  • Unsecured personal loans
  • Unpaid medical debt
  • Payday loans
  • Past due utilities

Apply for a Debt Consolidation Loan to Simplify Your Finances, Save Money, and Rediscover Your Financial Confidence!

If you are ready to put your debt behind you and put yourself on track to a bright financial future, then debt consolidation could be a great option! With this tool, you merge several high-interest debts into a single loan with lower rates to simplify your finances, repay debt faster, and save substantial money in the long run. 
Visit our Debt Consolidation page to apply for a debt consolidation loan today!

banks Cerritos, banks los angeles, banks montebllo, camino credit union, Camino FCU, Camino FCU East LA, Camino FCU Montebello, Camino FCU Rates, Camino Federal Credit Union, camino member, checking account, consolidate debt, credit bureau, credit union, credit union Cerritos, credit union credit cards, Credit Union East LA, Credit Union Los Angeles, credit union Montebello, debt, debt consolidation, Federal Credit Union East La, Federal Credit Union Montebello, join a credit union, member of a credit union, membership savings

Categories

  • Auto Loans
  • Blog
  • Budgeting
  • Credit Union
  • Debt Consolidation
  • Estate Planning
  • Financial Tips
  • In the Community
  • Loans
  • News & Events
  • Our Culture
  • Personal Loans
  • Promotion
  • Uncategorized

Camino Federal Credit Union new logo - See the New Look - New Logo

Montebello Branch

520 N Taylor Ave
Montebello, CA 90640
(323) 722-3400

 

Support

Consumer Protection

Lost or Stolen Card

Check Loan Status

Member Service

(800) 835-3400
Contact Us

Connect With Us

Equal Housing Lender
Equal Housing Lender
National Credit Union Administration
National Credit Union Administration
© 2023 - All rights reserved - Federally insured by NCUA, Equal Housing Lender | NMLS ID 666196     Disclosures Privacy Policy
Mobile Banking: Standard data & messaging rates apply.
If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-835-3400 for assistance.
Also, all products, services and information available on this website are also available at any of our physical branches, where we would be happy to assist you further.
We use cookies to personalize content and to analyze our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you’ve provided to them or that they’ve collected from your use of their services.OKNoPrivacy policy
We use cookies to personalize content and to analyze our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you’ve provided to them or that they’ve collected from your use of their services.OKNoPrivacy policy