Paying with high interest credit cards and loans can be overwhelming and put a strain on your personal and financial life. Debt Consolidation is a simple solution to use the equity in your house to consolidate these debts in one simple payment.
Usually, the interest rate is the lowest on mortgages. This also results in improved monthly cash flow
Debt consolidation takes your multiple debts, and combines them into one monthly payment. By doing this, you can pay off your debt in a few years. Keep in mind you still can’t miss a payment after consolidating.
Consolidating your debt will lower interest rates, allowing you to save money on interest and reduce your payments each month. Using consolidation helps you pay down debt faster. You can use money from the loan to pay off the debt, then pay back the loan in lower payments.
THE FOLLOWING DEBTS CAN BE CONSOLIDATED
Only have one lower payment: consolidation takes your list of debts and puts them all into a single, lower payment. One payment is easy to remember, and pay.
Debts get paid off quickly: Within three to five years, your debt will be paid off.
Low interest rates: Low interest rate will allow you to make bigger payments since you will be saving money.
WHEN IS A GOOD TIME TO CONSOLIDATE DEBT?
If you are in any of the following situations, consolidating debt will be a good idea.
Poor spending habits: If you are spending more money than you are making.
Credit card Issues: The balance of your credit card is growing and not shrinking, and you having more than five credit cards with debt. Also, consider consolidation if you are close to, or at the end of, your credit card limits.
High interest rate: you have an excess of 18.99% interest rate with your credit cards.
Getting turned down: If you have been turned down for an in-store loan, or turned down for a credit card, due to a high ratio of debt to income.
Minimum payments are doing it: If you are only making minimum payments and it isn’t paying down the debt.
First, make a list with all the debts you need to consolidate. By each debt, record the amount you need to pay. Include the monthly payment and the date it’s due. Make sure to record the interest rate you are paying for each one. By doing this, you will find out the total amount you need to ask for when getting the consolidation loan.
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