Start Debt consolidating advice

Debt consolidating advice

Here’s why you should skip debt consolidation and opt instead to follow a plan that helps you actually win with money: The debt consolidation loan interest rate is usually set at the discretion of the lender or creditor and depends on your past payment behavior and credit score.

Find out more about debt, ways to avoid getting into debt and the various options you might have when dealing with debt, including Debt consolidation, Debt Management Plan, Individual Voluntary Arrangements (IVA) and Bankruptcy Debt is a word that encompasses a wide spectrum of circumstances – and not all of them are bad.

For example, you might have bought a house using a mortgage with a cracking low rate or have a balance sitting on a 0% purchase credit card.

In fact, you end up paying more and staying in debt longer because of so-called consolidation.

Get the facts before you consolidate or work with a settlement company.

Their behavior hasn’t changed, so it’s extremely likely they will go right back into debt. The debt includes a two-year loan for $10,000 at 12%, and a four-year loan for $20,000 at 10%.

Your monthly payment on the first loan is $517, and the payment on the second is $583. You consult a company that promises to lower your payment to $640 per month and your interest rate to 9% by negotiating with your creditors and rolling the two loans together into one. Who wouldn’t want to pay $460 less per month in payments?

But let’s be honest: Your interest rate isn’t the main problem. This specifically applies to consolidating debt through credit card balance transfers.

The enticingly low interest rate is usually an introductory promotion and applies for a certain period of time only. In almost every case, you’ll have lower payments because the term of your loan is prolonged. Your goal should be to get out of debt as fast as you can!

You are only restructuring your debt, not eliminating it.

You don’t need debt rearrangement, you need debt reformation.

It’s when you are unable to service your debt and it starts to spiral out of control that problems start.