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Consolidating Debts and Getting Benefits

If you have already tried to lower your debt on a monthly basis by monitoring your personal spending but much progress is not made because of high interest rates, late fees, etc; then consolidating debts is the best solution for you.

There are a lot of debt consolidation agencies out there. You need to do your research before making a decision on which company to enroll with. Make sure they spend a significant amount of time analyzing your debt situation before deciding on a course of action. Make sure you understand all details of the agreement clearly and everything is put down in writing.

What are the benefits which can be obtained through debt consolidation?

One monthly payment instead of many – paying separate bills for each debt consumes time and is difficult to keep track of. When you consolidate your debt all your accounts are merged and you have to make just one payment to the firm and they will disperse the relevant amount to each creditor. The date for payments will be a date that’s convenient for you.

Reduction of interest rates – each of your unsecured debts will have varying interest rates. Through a debt consolidation plan these rates will be reduced significantly by the counselors through negotiations. This means your payment goes towards settling more of the principle amount and less towards the interest charge. Therefore you will pay off your debt faster through the scheme.

Improves your credit rating – if your account has past payments which are pending and you want the account to be re-stated as current, the creditors will request you to settle all past due payments. Through a debt consolidation scheme your account will ‘re-aged’ or will be marked as current without the past payments needing to be settled.

Removal of over limit and late fees – the more debt you accumulate and the more delayed the payments become; your account will be charged with over limit and late fees. If you enroll in a consolidation scheme, both types of fees will be removed from your account.

Debtor Repayment period will reduce – if you try to repay your debt by yourself through making only the minimum payments, you will be paying off your debt forever. Through a consolidation scheme you will be able to settle all your debts in a shorter period.

Avoid being harassed by creditors – once the consolidation company takes over your account they will be representing you. There will no longer be any harassing letters or phone calls from your creditors and you will at last have some peace of mind.

Article Summary
Most of us carry some amount of debt with us all the time. When this reaches a level that’s hard to control or when you have too many creditors to settle, consolidating your debt will offer you the best possible benefits.

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