Feeling bogged down by fast accumulating debts? Pulling your hair out, trying to clear all the piling debts, only to find yourself falling deeper into the ditch? Then debt consolidation can be answer to your most pressing financial troubles. Dealing with bad debts can be a harrowing experience, with seemingly no respite on the horizon. However, with sound strategy and die-hard dedication, you too can lead a debt-free life.
An overview on debt consolidation
The concept of debt consolidation is simple: you take all your existing debts and merge them in manageable source, to better handle your liability. Few highlights of debt consolidation - low interest rate, easy repayment terms, low risk factor and improved credit score. Debt consolidation will be designed after careful evaluation of your overall financial condition making it easier for you to be at par with your debts. Furthermore, you do not require pledging any collateral to consolidate your loan.
Lower interest on debt consolidation
Debt consolidation is not without its fair share of pitfalls. Although it might seem convenient to pay all your debts in a single monthly-sum, it does not make it any less expensive. This is especially so when you are dealing with unsecured loans with higher interest rates. Fortunately, there are many things that you can do to slash back the rocketing interest rate.
Go for a home equity loan. With home equity loans, you will enjoy the lowest interest rate possible; this is because the loan is secured with your property as mortgage, reducing your chances of defaulting.
Shop around for low-interest debt consolidation. You can literally save thousands of dollars by simply comparing interest rates from different lenders. Before opting for any loan, make sure to carefully read the terms involved, so that you are not taken off guard by hidden charges.
Consider opening a new credit card account. Many credit card companies offer 0% rate of interest on balance transfer. However, remember these offers are introductory that will not last more than 3 to 6 months. During this term, you can work on repaying your loan. At the end of the introductory period, when the company starts levying interest on you, you can simply open a new account or transfer your balance to some other company.
What debt consolidation agencies do?
When deciding to consolidate your loan, your agency plays a pivotal role. Here is a look at the type of agencies and the role they play.
Debt settlement - The agency will work with your creditor to lower your loan amount. All the overhead charges will be eliminated; an easy repayment plan will be worked upon, helping you tackle your debts better.
Debt consolidation - A simple bank loan acts in the stead of consolidation loan. You can put up collateral to lower interest on loan or opt for unsecured loan if you have good credit standing.
Debt counselling - These agencies conducts workshops on money and debt management, helping you to handle your liability in a sound manner.
When feeling overwhelmed with debts, don't hesitate to seek assistance of a credible agent who can you with your problems.