3 Methods Of Debt Consolidation For Your Multiple Bills
Debt consolidation is a process by which your existing, outstanding debts are combined or consolidated into a single debt.
Consolidation of debt also helps reduce interest rates. Another convenience is of paying only a single monthly installment. Thus, if you are knee deep in debt and thinking how do I consolidate my debts, then you need to consider the following ways to do so.
- Consolidating Debt Program: If you can no longer handle your own debt and are burdened by multiple bills, then enrolling in a debt consolidating program is one of the best options you have.
The debt consolidation company that you seek help from first assesses your financial situation and offers you budgeting tips. Your creditors are notified that any further calls must be directed to the company and not to you. The company tries to negotiate with your creditors to reduce the interest rates on your loans.
You are required to pay one monthly installment to the debt consolidating company. This monthly installment is then distributed among your creditors by the company. Thus this program helps you as you get lower rates of interest, you don’t have to pay multiple creditors and you don’t have to attend the harassing calls of creditors.
- Debt Consolidation Loan: By taking out a debt consolidating loan, you can pay off multiple bills all at once. This loan brings together all your multiple outstanding balances such as your credit card bills, utility bills and store card bills into a single low interest loan.
This is a long term loan but you have to pay only one monthly installment instead of paying too many creditors. Moreover, this monthly payment is much less in comparison to the sum total of your existing monthly installments.
- Balance transfer method: It is the transfer of a part of a balance or the full balance from one account to another. If you have multiple credit card debts, then balance transfer could be one of the best solutions. A balance is usually transferred from one credit card to another. This other credit card has lower rates of interest. Thus, in this method your interest rates get reduced.
These are a few methods by which you can consolidate your multiple loans. Every method is beneficial and should be chosen as per your needs.
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