Hundreds of thousands of people are over their heads in debt due to overspending, a low paying job or a job loss. Many struggle to make ends meet, choosing which bills to pay and which to leave for another time. This causes a lot of stress, not to mention having to deal with collectors calling all day long demanding their money. One solution is to get debt consolidation help. By consolidating your debts into one large debt, you’ll find yourself free of having to juggle seven different payments and lenders; plus you’ll save lots of time and money in the long run.
A Look at the Numbers for Consolidating Debt
When you get credit relief, you are going to be saving lots of money that would otherwise have gone to the lenders in the form of interest. By consolidating all of your debt, you’ll likely save several percentage points or more. Let’s say you have five debts at the following interest rates: 9%, 12%, 15%, 17% and 20%. Doing some simple math, adding up the numbers and dividing the sum by five, you’ll find the average is 14.6. If you can consolidate them into a loan that is only 12% or 13%, you’ll save hundreds, if not thousands of dollars, for the remainder of your loan just by consolidating your debts. Just looking at the numbers, it might not seem right to put a loan that’s at 9% interest into a consolidation loan that has a 12% interest rate. However, as long as the average of all of your numbers end up considerably lower than your highest debt, you’re still ahead.
Consolidating Debt Creates One Single Monthly Payment
You’ll also enjoy the convenience of having just one monthly payment to handle. Simply write out and send in one check a month, and you will eliminate the effort, time and stress of having to balance multiple accounts and making sure that all the payments are received and credited each month. A debt consolidation company will manage the payments to your creditors on your behalf. They’ll also take the stress out of your day by dealing with creditors, people who are known for being rude and annoying.
Once you’ve paid them off, the daily phone calls will stop, and you won’t cringe each time the phone rings.
Additionally, you won’t be penalized with late fees or overdraft fees because, as long as you make your payment on time, the consolidation company will make sure that creditors are paid on time. And since you only have one payment to budget for, you can make sure that your checking account has plenty of money in it to cover your single payment.
Negotiating Lower Balances on Debts
If any of your debts are old and you haven’t paid on them in at least six months, your debt consolidation company may be able to negotiate lower balances with them. Maybe you haven’t paid on a credit card, with a balance of $2000, in over two years. By now, the person who owns the debt will just be happy to get some money for the debt. You can start negotiating for a lower pay off amount so that you can get the bill paid off sooner and for less money. Often times, a very old debt can be settled for a quarter, or less, of its original value. So your old $2000 debt may end up being only $500.
Consolidate Debt Gets You Out of Debt Quicker
Going into a debt consolidation program in order to find credit relief is a great way to get out of debt sooner than you ever thought possible. If you were to continue to make just the minimum payments on your debts as the lender asks, and without adding to your balance, it could take ten to twenty years, depending on the debt. Individuals who choose debt consolidation find themselves debt free in an average of two to six years. Lower interest rates and payments, plus a credit counselor who holds you accountable, all help to make it easier and quicker to get out of debt.
The sooner you get out of debt, the sooner you’ll enjoy having a higher credit score so that you can get a mortgage or car loan. High credit scores also help to lower your insurance premiums and are important in some career fields. Having too much debt has probably taken its toll on your credit score, but once you start making regular payments and lower your debt ratio, you’ll notice your score creeping higher and higher. Don’t wait another minute to take action. Contact us to get more information on how you can find credit relief through debt consolidation.