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| Debt Consolidation Source: LendingMemo, cc-by-3.0, flickr |
People’s needs have changed a lot over the years
and so has the method of getting financing and loans. Loans are made available to meet all kinds of
needs – education, home loans, and auto loans and so on. It is easy to get department store loans of a
kind too – through their credit cards.
It is very easy to get into trouble with having too many cards and owing
a lot of money. There is help available
for people whose debt is out of control and the list of creditors keeps growing
- debt consolidation. Taking this option
can help people save time and money. But
how does one figure out if this is the right choice to make? Talk to your
finance expert for Simple Debt
Solutions now!
What is
debt consolidation?
Debt consolidation comes with its pros and cons –
like any other choice in life. To many
people, this seems like an effective solution, but it may not be right for
everybody. Debt consolidation is a
method by which people roll all their debt into one big amount with the help of
debt consolidation companies. Advisors
who work for these companies usually help people to do so and work with
creditors on the terms and conditions for repayment.
People can roll all their loans including credit
cards into a single loan and make one payment every month. This convenient option can be used by putting
equity in one’s home as collateral.
Paying off one amount is far easier to deal with than several minimum
balances.
Benefits of
debt consolidation:
Many people struggle to get their debt under
control. Once all the debt is rolled
over and people have just one payment to make, they are able to do so by
changing their lifestyles just a bit.
These kinds of loans also come with lower interest rates which is a good
thing as it leaves a borrower with a little extra in the bank which can be
saved.
Disadvantages
of debt consolidation:
In most cases, debt consolidation is done based
on home equity. This is usually a risky strategy, especially if one fails to
make loan payments. Even missing one
payment can have disastrous consequences.
People have to seriously sit down and take stock of how their finances
got into such a mess in the first place.
Many people have trouble controlling their spending habits and for them,
debt consolidation may not be the right choice.
They could be in the same kind of a situation in
the future and risking one’s home is not a smart idea. If a person is not willing to rein in their
spending, then debt consolidation is not the right choice for them.
What kind
of debts can be consolidated?
Credit card debt, personal loans, auto loans,
student loans and what one owes on different store credit cards can be
consolidated into one lump sum. One
thing that a person should keep in mind is that paying off such loans requires
a lot of discipline and patience.
It is possible to get one’s finances back on
track and save for the future. Talk to your financial advisor now for Simple Debt Solutions.
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