Understanding Business Debt Consolidation Loan Options

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is Business Debt Consolidation?
Pros and Cons of Debt Consolidation Loans
A debt consolidation loan can make your loan payments simpler to manage. Ideally, a debt consolidation loan will allow you to lower the amount of interest you’re paying on your business debts. Paying back your consolidation loan promptly each month may help you build a positive personal or business credit history over time. A lower monthly payment can help free up cash that you can use to cover day-to-day operating expenses.
When you apply for a new loan, it can have a temporary negative impact on your credit. Before taking out a loan for consolidation, you need to make sure the lender allows the funds to be used for that purpose. Some of the loans you’re trying to pay off may have prepayment penalties. There may be an origination fee attached to your consolidation loan. You could end up with a longer repayment term. While that can lower your monthly payment, you can end up paying more in interest over the course of the loan.
Is Business Debt Consolidation the Same as Refinancing?
Will a Business Debt Consolidation Loan Help My Credit?
When to Consider Consolidating Debt
Lenders Offering Business Debt Consolidation Loans
Bank Business Loan
Alternative Business Loan
Personal Loan
How to Qualify for Business Debt Consolidation Loans
Why Take Out a Debt Consolidation Business Loan?
Frequently Asked Questions
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About the Author
Su Guillory is a freelance business writer and expat coach. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.
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