Best 5 Reasons why Discover Loans is Better for Debt Consolidation
The fact that is more important in terms of reasons, The SAVINGS. Unlike the other lenders, Discover personal loans is designed for a better debt consolidation to improve your savings.
What makes a debt consolidation better?
The answer is very simple, but little bit calculative.
Suppose, you have two credit cards debt and a car loan debt. Let’s assume, the total return amount is $20,000 (pending debt).
Let’s create a virtual figure of the loans:
- Car loan debt A = $9,000 at a fixed rate of 15%.
- Credit card debt B = $7,000 at a fixed rate of 22%.
- Credit card debt C = $4,000 at a fixed rate of 25%.
Time left to pay off your debts:
Loan A = 2 years.
Loan B = 2 year.
Loan C = 1 year.
Our next step is to find the total figure, how much you will be spending for the three loans?
Loan A – Auto Loan:
Fixed Rate: 15%.
Term: 2 years (24 months).
Monthly Payment: $436.38.
Total Interest Amount: $1,473.
Finally, we can calculate the debt-to-interest ratio (throughout 2 years): 16.3%.
(Note: The final debt-to-interest ratio is, the total amount and total interest percentage.)
You can use the debt consolidation calculator to find your results.
Moving forward to The Second Loan.
Loan B – Credit Card Debt:
Fixed Rate: 22%.
Term: 2 years (24 months).
Monthly Payment: $363.
Total Interest Amount: $1,715.
Finally, we can calculate the debt-to-interest ratio: 24.5%.
The Third Loan.
Loan C – Credit Card Debt:
Fixed Rate: 25%.
Term: 1 year (12 months).
Monthly Payment: $380.
Total Interest Amount: $562.
Finally, we can calculate the debt-to-interest ratio: 14.05%.
Note: Unlike, the other banks and financial institutions, those offer a credit card with higher interest rates, as the above examples. Discover has the best credit card, with a starting rate: 14.74%. Find out more about Discover credit cards.
From the above figures, doing a simple math can be a quick answer, to how we will be saving from Discover Loans?
Total monthly payments for 3 debt: $1,179
Grand total interest percentage: 18.75%
Grand total interest amount: $3,750
(This is the total extra interest money, that you have to pay.)
Not to mention, but there can be more hidden fees and extra fees for late payments and pre-payments. As a result, the actual interest can go more than 18.75%.
You will be losing more of your money.
Now, moving toward, to discover personal loans, let’s calculate what we can achieve from it.
Discover Debt Consolidation
It’s time to find out why Discover is more convenient. to be a better debt consolidation solution for you. Discover personal loans is not offers personal loans for debt consolidation only. You can apply for any particular purpose, a wedding or trip. But, as we have been discussing the debt consolidation, from Discover, first we have to find out what exactly your rate could be.
You can find you’re rate by processing the application with Discover personal loans.
Discover minimum credit score requirement: 680. (Average credit score).
If you don’t know, what is your credit score?, simply grab a FREE CREDIT REPORT to find out your score.
Let’s begin the debt calculation:
Suppose, from discover, the debt consolidation fixed rate is 15% for you.
The total amount you will be asking is $20,000 for 2 years term. Therefore, you would be paying the amount of $969 as monthly returns, for the next 24 months.
And, the total payable amount to pay off your debt consolidation: $3,273
So, the final picture would be, total saving $477. (Three Loans= 3,750, One Discover Debt Consolidation= $3,273).
The other 4 vital facts why discover personal loan is better for Debt Consolidation:
One Payment Every Month
For 3 of the loans, you have been paying different payments. Even the terms are different for each one. (example: late payment policy).
Life is always busy, giving time to family, emergencies, and things happen. We might miss one payment which is not set the autopay option. So, taking the headache of missing one payment, it’s better to go with Discover debt consolidation. Just one automated payment every month, no extra fees.
You Deserve To Save More
No pre-payment fees. When you have extra money and can add more to the monthly payments. You would be saving more from the interest rate that will go lower on further payments. No prepayment penalty at all.
No Application Process Fee
The origination fee, as bankers call it, the application processing fee. A small percentage of the total loan amount.
Suppose, For a $20,000 loan, even 2% of that is $400. More or less, most lenders take the origination fee. With discover loans, you are free to take all your money, paying $0 for the application process.
Save 100% Pay No Interest
Yes, what you have just read, it’s true. Pay the loan money, within 30 days. You have to pay no interest at all. Best savings.
As discover personal loan process is entirely online. You can simply login to your account. Manage your payments, see what’s left and more offers. Not only that, when you sign up to process your personal loan. Most of the decision made, within the same day of the loan application. With every loan you process with Discover, you will get a Free Credit Scorecard from your account.