Things You Should Know About Debt Consolidation and What to Do
Paying several debts every month is difficult and can make your debt level rise especially if your income is fixed. Luckily, these challenges can be overcome if you consider debt consolidation – a process where all unsecured debts are combined into one to allow you to make a single monthly payment. Alternatively, it is also possible to pay off all your debts with a consolidated loan. So if you are finding it difficult to pay your debts, you need to talk to us. Our work is to connect you to lenders and match you with one who can help you pay off your debts hustle free.
We are aware that multiple unsecured debts that are not being paid could be secured by your home. Also, if the unpaid debts are on separate credit cards, the risk of having your home foreclosed increases. So if it becomes difficult to pay the debts, it could make you lose your home. However, by partnering us, we will connect you to a lender who can consolidate all those debts and allow you to just make one payment every month. What happens is that we will connect you to a debt consolidation company or a lender who will consolidate your loans and allow you to make one monthly payment. The company will, in turn, divide the payment and send it to your creditors.
Notice that your debt consolidation company does not reduce the debt level but will help you feel that your burden is a bit lighter. You will still have the outstanding debt to pay but the difference is that your work will entail just making one payment to your consolidation company. The company must then ensure that the individual creditors are paid.
A good debt consolidation company should ensure that the consolidated debt has a lower interest rate and a lower monthly payment or both. It does not matter whether you are consolidating home equity loans, personal loans or student loan. The idea is that when you choose to consolidate the loans, the repayment period should be lengthened and the debt burden should be lighter. Of course, by the end of the day, you will end up paying the same outstanding loan plus more interest if the period of payment is lengthened. However, debt consolidation should help make your burden lighter to enable you to pay your debts comfortably.
Precautions to Take When It Comes To Debt Consolidation
It is true that debt consolidation industry has many scams and so you need to evaluate a company of your choice carefully before committing yourself. There are cases where debt consolidation companies have pushed people in more debts by making the existing loans become more expensive. Many companies out there will pocket the monthly payment and leave you with a damaged reputation. Others will give you expensive loans in the name of consolidating and offsetting your previous loans. In fact, this is where we come in. We have many lenders on our network and so our job will be to match you with the right one depending on your needs. We will also help you evaluate each of the debt consolidation companies on our network and the products they offer so that you choose one that will make your situation better.
There are also cases where debt consolidation made people end up with more debts after a short period of time. In addition to the old debt, consolidation efforts may create a new debt. This will certainly compound the problem. To avoid the pitfall, it may be necessary that you close the old accounts and focus on paying consolidated debts.
If you have been paying your credit cards, car loans and student loans or any other loans but you feel that your debt level is not going down, it is recommended that you do something fast to help change the situation. Debt consolidation is one of the options that you need to consider. It can help you refinance your loan, have the period of payment extended and improve the terms of payment. Notice that debt consolidation will not eliminate your debt but will give you reprieve and allow you to pay the existing loan in a comfortable manner. With debt consolidation, you will be under no obligation to deal with the individual creditors. Your debt consolidation company will receive payments from you and disburse them to your creditors. It will reduce your level of stress because you will be under no obligation to answer calls from your creditors. This is critical since it will give you peace of mind and help you focus on just paying a single debt.
Also, consolidating medical bills, personal debts and other loans into one debt is critical since it helps to lower interest rates and will give you some relief. The process can help you restructure your debt and allow you to share your plan with your debt consolidation company. It will give you a chance to learn good money habits, which will help you stay out of debt and start building your wealth.