You are going to be able to save money and lower your rates and payments at the same time with bad debt consolidation. A company will do it all for you.
Those who are struggling with debt often hope that the promises are real. Think about all the businesses that boast these offers. Advertisements and mailings are visible everywhere for consolidating debt.
They tell you that debt relief is a simply click away, or cut your payments or interest rates in half.
No one wants to be in debt and these companies know that. So, they offer to help you get out of debt which is very tempting but there are several facts that you need to know before you take this route.
There are three bad consolidation moves that you might take
If you want to consolidate your debt, you probably are already behind on loans. You can get a consolidation loan but the interest rate is going to be extremely high. In reality, you have lowered your payments but you are spending more on the interest. So, you end up paying longer which means paying more.
Second, is the consolidators who claim to handle everything. They promise to make your life easier by getting you lower interest rates and lower the monthly payment. All you have to do is give them a onetime setup fee.
That might be true but, they receive up to a 15% rebate from the companies that you are paying. That means that 15% of your payment every month, goes to them.
Why should pay them when you can negotiate with your creditors for free?
Creditors are known for threatening debtors. Knowing this, you probably do not want to deal with them but, think about it this way. If you talk to several consolidation companies, you will find they all offer the same thing. Here is the kicker though. They tell you that it can take 32 years for you to pay off your debt on your own. They offer to cut that time down to 4 and half years. Look for a financial calculator on the internet.
Enter the numbers they gave you. You are going to find that you can pay off your debt faster on your own.
The other downside is that these companies are known for missing payments. Isn't that what you are trying to stop?
Finally, do not transfer balances from one credit card to another. In the beginning you may have a lower interest rate but it is only an introductory offer. To keep a low rate, you would have to constantly switch cards. This has a negative impact on your credit.
If you make this choice, contact your credit card companies yourself and have them closed out at your request. Make sure to that they mark the account as closed at customer's request.
There are good choices you can make for paying off debt.
For a tax deduction and low rates, you might apply for a home equity loan. Use this money to take care of your debt.
You can also refinance your home if you have equity built up. Pay off your debt with the money you receive.
Several other option are refinancing your car, getting a personal loan and negotiating for better interest rates. - 23309
Those who are struggling with debt often hope that the promises are real. Think about all the businesses that boast these offers. Advertisements and mailings are visible everywhere for consolidating debt.
They tell you that debt relief is a simply click away, or cut your payments or interest rates in half.
No one wants to be in debt and these companies know that. So, they offer to help you get out of debt which is very tempting but there are several facts that you need to know before you take this route.
There are three bad consolidation moves that you might take
If you want to consolidate your debt, you probably are already behind on loans. You can get a consolidation loan but the interest rate is going to be extremely high. In reality, you have lowered your payments but you are spending more on the interest. So, you end up paying longer which means paying more.
Second, is the consolidators who claim to handle everything. They promise to make your life easier by getting you lower interest rates and lower the monthly payment. All you have to do is give them a onetime setup fee.
That might be true but, they receive up to a 15% rebate from the companies that you are paying. That means that 15% of your payment every month, goes to them.
Why should pay them when you can negotiate with your creditors for free?
Creditors are known for threatening debtors. Knowing this, you probably do not want to deal with them but, think about it this way. If you talk to several consolidation companies, you will find they all offer the same thing. Here is the kicker though. They tell you that it can take 32 years for you to pay off your debt on your own. They offer to cut that time down to 4 and half years. Look for a financial calculator on the internet.
Enter the numbers they gave you. You are going to find that you can pay off your debt faster on your own.
The other downside is that these companies are known for missing payments. Isn't that what you are trying to stop?
Finally, do not transfer balances from one credit card to another. In the beginning you may have a lower interest rate but it is only an introductory offer. To keep a low rate, you would have to constantly switch cards. This has a negative impact on your credit.
If you make this choice, contact your credit card companies yourself and have them closed out at your request. Make sure to that they mark the account as closed at customer's request.
There are good choices you can make for paying off debt.
For a tax deduction and low rates, you might apply for a home equity loan. Use this money to take care of your debt.
You can also refinance your home if you have equity built up. Pay off your debt with the money you receive.
Several other option are refinancing your car, getting a personal loan and negotiating for better interest rates. - 23309
About the Author:
Layla Vanderbilt is the webmaster for a leading website that offers for instant bad debt consolidation advice and guidance.
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