Why You Should Choose Debt Consolidation
by: Jeff Dragt
If debt is currently an issue in your life, debt consolidation really can
save you from the stress of bills, debt collectors, and the nagging thoughts of
foreclosure or even bankruptcy. Debt consolidation can drastically change your
life within weeks, months, or years depending on your current debt situation.
Consolidating your debts will allow you to live with peace of mind that you are
taking care of your financial obligations while continuing to live a happy life.
Debt consolidation is taking all of your bills and fitting them into one
monthly payment. Fitting all your bills into one payment also means one interest
rate, which will limit the amount you pay out every month, saving you a lot of
money in the long run. Debt consolidation also makes paying off multiple debts
easier because the monthly payments can be lowered when you take away insane
interest rates. The average debtor pays more interest every month than they do
on the actual principal balance of their debt! Eliminating the sky-high interest
rates is a good start to getting your debts paid, without going completely
broke.
Many people assume when they can’t pay the bills it’s time to just throw up
their hands and consider drastic actions such as foreclosure, repossession and
bankruptcy. While there are some extreme cases where bankruptcy would be the
best option, foreclosure is almost always avoidable as is repossession. Banks,
car dealerships, mortgage companies, and creditors don’t like to have to take
back property or write off your debts, they would rather work with you on debt
consolidation so that they can get back what they are owed and you can go on
your way with your credit still in tact. Bankruptcy, repossession, and
foreclosure are not easy outs when it comes to debts; in fact, they are choices
that will continue to affect you for a long, long time. Consider debt
consolidation before making any hasty decisions.
Debt consolidation on your own can be tricky, or downright impossible
depending on your credit situation. Luckily, there are debt consolidation
companies waiting to help people who are in over their head, just like you! Debt
consolidation companies will take your credit report and any unreported debts
that you can give them and work out a payment plan for you. These debt
consolidation companies often contact each company and strike a deal to lower or
get rid of the interest and even split the balance of the amount due. Obviously,
lowering or getting rid of interest and part of each debt will limit what you
spend each month, enabling you to actually pay the bill.
What’s the catch with this type of debt consolidation? Well, there really
isn’t one. Yes, this is a business and the consolidator does make money because
while he takes away the interest that each company is charging, he will charge
you interest or a percentage of what you owe. Doesn’t seem fair? It is! It works
out better for you, because even though you are still paying interest it’s just
one interest payment for all the debts you currently hold. So, instead of paying
twenty seven percent to ten companies you’ll pay twenty percent to one company.
So, you go from having multiple payments and interest rates to just one payment
for all the bills and one interest rate. It works! If you follow the plan, and
make your monthly payments debt consolidation will soon have your credit report
looking much better than it does right now.
You may think that you have so much debt you cannot possibly afford to repay
even on a debt consolidation plan. You’d be surprised what these companies can
get done on your behalf. And, if your debt is that outstanding you can work
through the process slowly, a few debts at a time. There is nothing wrong with
the process taking a while, as long as you keep up with the process and intend
to actually pay off your debts. Getting your credit where it should be does take
time, but it’s worth it. Your credit is your buying power, and each payment you
make gets you closer to having more of it.
Worried that the companies you are dealing with won’t work with a debt
consolidation company? You’d be surprised. Yes, the companies will loose a
little bit of money compared to if you showed up with cash to repay the debt
tomorrow, but in the long run it’s better for them to take a debt consolidation
deal than not. Most companies figure they’d rather get a portion of your debt
back and settle the deal than not get anything back at all. Getting seventy five
percent of your debt back is more reasonable to them than to keep paying debt
collectors to contact you and try to get the money back. All in all, any money
is worth striking a deal over, and that is why a debt consolidation company can
really get you where you need to be. They are professionals and they know how to
get companies to agree to their terms.
Debt consolidation companies will usually work with you to get your debts
paid off within a reasonable monthly payment. Each month you’ll make just one
payment, reducing the time and stress of paying the bill, and each month you’ll
be a step closer to financial freedom. Paying off your debts, through debt
consolidation or otherwise will take a weight off your back that you may not
even realize is there. No one wants to have unpaid debts, but sometimes life
gets in the way and it happens. It happens to the best of us. But, don’t be too
proud to consolidate those debts and get back on the right track. Open up your
local phone book, or get online and find a debt consolidation service in your
area. Contact a debt consolidator not with shame, but with pride, because you
are stepping up to do the right thing.
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