Debt Consolidation: 5 Ways to repay debt and save dollars
Debt consolidation: 5 Ways to repay unsecured debts and save dollars
Video on Free Online Debt Help Community by Michael Bovee
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- Free debt counseling to be debt free
- Information on how to deal with debt collectors
- Forums to discuss your financial issues
- Resources on various debt relief options
- Tools, letters, and budgeting application
- Informative articles to gather knowledge
How much consolidation can save you
Debt consolidation - Is it good for all? How does it work?
Debt consolidation is good for those people who are unable to pay off credit card debts, personal loans, payday loans, private student loans and medical bills due to costly financial mistakes. This debt relief option is good for those who want to pay off unpaid debts, manage multiple bills efficiently, pay less on interest rates and save money. Know more about its pros and cons...
Let us see this example to know how debt consolidation would work for you.
Your total balance on credit card B (10%) - $15,000
Your total balance on credit card C (15%) - $20,000
Your current average interest rate – (20% + 10% + 15%)/3 = 15%
Debt counselors negotiate with creditors and interest rates are lowered to:
Credit card B – 8%
Credit card C – 10%
So, your revised average interest rate is (15% + 8% + 10%)/3 = 11%
This means you're saving 4% on interest rate.
If your total credit card bill amount is $50,000, then your total savings will be – (4% * 50000) = $2000
Debt consolidation program
This is where the certified counselors of a debt relief company help you organize an easy and budget-friendly single monthly payment plan. With this option, you replace your multiple credit cards and other bills with a single monthly payment. It helps you pay off your debts systematically within a certain period.
Debt consolidation loan
This is where you take out a personal loan from a financial institution, such as a bank, to pay off your multiple creditors instantly. Through this loan consolidation option, you make one consolidated low monthly payment on the new loan.You can obtain this loan with suitable terms if you have a good credit score.