Are you having trouble keeping up with the car payment? If so, chances are you might be having trouble keeping up with other bills as well. Not being able to keep up with your bills is a sign you may have too much debt at the moment. You should consider consolidating your bills as a method of debt relief. There are many benefits to consolidating your debts.
Consolidation Offers You A Second Chance
Consolidation offers you a chance to come clean about your debt issues. Negotiating a new payment plan with your creditors will reduce the burden you are currently facing.Your creditors want you to have the ability to pay your bills each month. This is why they are willing to sit down and talk about a new payment plan. You should take advantage of this opportunity to reorganize your finances.
Rolling all your debts into one payment will lower the amount of interest you pay each month. Lowering your interest rate by even 5 percent can save you hundreds of dollars each year. Paying 15 percent interest as opposed to 30 percent interest on a $25,000 credit card debt will result in a savings of $3,750 a year in interest charges.
Think of all the things you can do with that money. You could put that money into a savings account if you wanted to. That money could even be used to pay down your principal balance as well.
Consolidation Is Much Better Than Bankruptcy
Consolidating your debts offers you the chance to pay your bills without having to declare bankruptcy. Going bankrupt can have severe consequences for your credit. Chances are high that you would still have to make payments to creditors anyway.
Debt consolidation will cost you less than bankruptcy will in the long run. You don’t have to pay for a lawyer, your credit score won’t suffer as much and you can settle your debt for less than you owe.
Let’s say you wanted to file for Chapter 13 bankruptcy. Lawyers fees are going to run you as much as $3,500. The interest rate on any credit card you take out will automatically be at least 20 percent.
It will certainly cost the average credit card user hundreds of dollars a year. Making payments to creditors may add as much as $1,000 a month on top of that. How much are you really saving by choosing bankruptcy?
Debt consolidation will only cost you a percentage of your savings. For example, you would owe $1,250 on a debt that was reduced from $25,000 to $12,500. Lowered interest and principal payments will save you even more.
Other Benefits Of Debt Negotiation
Creditors won’t be able to call you once your accounts are negotiated through a credit counselor. Your debt relief service will take care of all creditor inquiries for you.
Consolidating your debt will not lower your credit score. However, creditors may indicate you are in credit counseling right now. The impact of this is usually negated once the debt is paid off. It is also negated by the fact that you have less debt once you are done paying off the balance.
A bankruptcy will stay on your credit report for up to a decade regardless of the outcome. This means consolidation gives you a little more flexibility as opposed to your other debt relief options.
The best reason to pursue consolidation through negotiation is the fact that someone else will negotiate for you. Not everyone is cut out to take on their creditors. Allowing professionals in the industry take care of business for you can garner a much more positive outcome for you.
Stop worrying about making that car payment each month. Consolidate your debts and start making a better future for yourself. You deserve to live a life that is free from creditor phone calls and harassment. Consolidating your debts will save you a lot of money in principal and interest payments each month. Get more information about consolidating your debt. Call today to see how much you could possibly save.