Debt consolidation is the procedure of combining numerous debts at the lowest possible interest rate. Instead of paying numerous various accounts monthly, you only have to worry about one. At the same time, because the interest is lower, your debt does not grow as quick AND more of each payment you make goes to paying off the principal (original debt owed) versus the interest accrued each month.
The Benefits of Debt Consolidation In Burton
It can help a person manage their creditors and get back on their feet financially. This can help to keep them from losing their property to foreclosure or repossession and keep their credit rating from dropping due to late payments or charge-offs.
Here are three major benefits to consolidating your debt in Burton
Eliminate High Interest Debt
The average credit card interest rate is around 15 – 18 percent. If the majority of your debt is from credit or charge cards, then you may be paying a hefty sum of money in interest annually.
Car loans have an average interest rate of between one and seven percent. This can vary based on whether the car is new or used. It also depends on the length of the loan. A typical car loan is 36 months for a used car and 60 months for new.
Debt consolidation may be able to help you reduce these payments through negotiations. If you’re using a loan, then this debt would be paid off. As long as the loan’s interest rate is lower than what you’re paying, then you’ll save money.
Reduce Monthly Payments
Many people have hundreds of dollars of their monthly budget allocated for consumer debt, which does not include their mortgage. These payments can make a real dent in their budget and keep them from saving money.
Most credit cards have a minimum payment. This amount is due regardless of the balance. Many times this amount is just a little over the monthly interest. Because of this little is paid towards the principal balance.
It can reduce the monthly payment by paying off the debts with a loan. The new balance should be less, per month, than you’re paying now. If the consolidator is able to get the balance reduced, you’ll owe even less.
If you’re unable to get a loan. The debt consolidator can help make a plan to pay off the debts one at a time. They may also be able to get the interest rate dropped so that more of your payment will be applied to the principal. This will help to reduce the monthly payments as each debt is paid.
When you’re having debt problems it can have an impact on your credit score. Credit reporting agencies look at your payment history when calculating your creditworthiness.
One of the first things that happen to many people when they’re having credit problems is that they have trouble making payments. Each late payment incurs a fee. Over time, the payments and the fees add up. This may make it more difficult for you to pay.
Late payments are reported to the credit agencies. When you have a number of late payments. Or, if your payments start going over 30 days late, this could have a negative impact on your credit rating.
Since your credit score determines your buying power when it comes to getting a house or a loan for a car, it’s important to manage it well. A debt consolidator can help to get the creditors to report your bill as paid and thereby reducing its impact on your credit. Over time with the debts paid off, your credit score will recover.
How Debt Consolidation In Burton Helps You Get Out Of Debt
Whether you decide to use a debt consolidation loan or debt consolidation to help stabilize your finances, it is best to accompany these options with a credit counseling program so that you can learn to save money and make long-term changes to your spending habits.
When you enroll in our credit counseling services, we help teach you to live within your means. You will provide all your financial information and list the debts you owe to the counselor in order for him or her to offer informed counseling. After getting an organized picture of your financial situation, the counselor will provide options that match your resources, lifestyle, and goals.
Should You Consolidate Your Debt In Burton QLD?
Only you can decide if debt consolidation is right for you. However, you can’t do that until you have all of the facts. The only way to get that information is to contact a debt consolidator.
You may decide to fix your debt problem yourself. While this is an option, understand that many creditors will not negotiate with you. If this happens, then you may end up paying the full amount on all of your debts. This will make paying off your debt take longer.
Making The Right Decision
Consolidating your debt is generally the much better alternative for low income consumers with lower credit ratings. After a complimentary consultation to identify the state of your finances, one of our licensed credit counselors will be designated to your case. They will then contact all your lenders and personally negotiate with them on your behalf. If possible, they’ll bring your accounts current, lower or eliminate your interest, and stop penalty costs. This can reduce your regular monthly payments by up to 60%.
We understand the importance of keeping the very best credit score possible. In fact, some of our investors were also debtors at one point and chose to consolidate their personal loans into one low interest monthly payment. We can assist you, too. Apply today and see how much you can save.