Yes, a business debt consolidation loan could be a good idea based on your situation. For example, if you are currently paying high and/or variable interest rates to multiple lenders, consolidating (or combining each payment you owe) into a single payment could decrease the overall amount that you pay.
Let’s take a look at a quick example of how this works.
|Interest Rate||Principal Owed|
|Business Credit Card 1||10 percent||$10,000|
|Business Credit Card 2||25 percent||$15,000|
In this example, you owe $4,750 in interest. If you take out a business debt consolidation loan for $25,000 with an interest rate of 15%, you can pay off your credit card debt, and you will only owe $3,750 in interest. Therefore, you can have potential savings of $1,000 if you pay off your loan on time.
In addition to savings, a debt consolidation loan can also help you take back your time. Let’s say you’ve incurred multiple debts to operate or expand your business (credit cards, loans, and more). Trying to remember when to pay each lender each month can be a hassle. With a debt consolidation loan, you can trade in multiple charges for a single monthly payment that’s easier to manage.
In any case, there are a few important things to keep in mind when considering debt consolidation loans. For example, if you do not have excellent credit, some lenders may not approve your loan. Many lenders also perform a hard inquiry/pull to assess your risk just to apply. A hard inquiry can drop your score temporarily by 5 to 10 points.
At BHG Financial, we look at more than just your credit score to understand your situation, and we work with you to create a personalized loan solution for your needs. Also, when you apply for a business debt consolidation loan, we do not perform a hard pull of your credit—so there’s no negative impact on your score.
Now that you know the benefits of debt consolidation loans, as well as the factors to keep in mind, contact one of our loan specialists at 866.280.5476 to see how our industry-leading financial solutions can help you.
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