Consolidating your Debts


How are you doing with your finances? Are you currently struggling? Did you fall into some serious pitfalls? For the most part, credit cards, loans and the like play a major role in every person’s lifestyle. Indeed, they are beneficial but also very fragile. A single misuse or wrong turn will result to serious debts and financial accountabilities. More and more people are becoming a victim of these especially in today’s economy where employment and money is scarce. If you are reading this post, probably you are also in the middle of such dilemma.



Luckily you’ve come to the right place. There are a lot of services out there who offer different programs to get you out of this situation. These include consolidation, settlement, negotiation and management. This post will be talking about a specific method called consolidation and I will show you how it works but before that you first need to find a debt help company that will work for you. Already have one? Let’s move on.


Let’s say you have three credit cards. One card has 10% monthly interest, the other has 15% and the last one has 20%. This means that the total amount of interests you will be paying every month is 45% not including the amount you really owed from those three cards. Debt consolidation is a good option to reduce all the accountabilities you have in those three cards into a single loan. By doing this, your monthly payments will be reduced (paying 45% interest versus that of the loan’s which is usually around 20%). However, your entire financial obligation will stay the same. If you owe $20,000 on three cards that will still be the amount you have to pay on the loan plus some interests and service fees.

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SO the only money that you can possibly save is just on the monthly interest payments. I used the possibly here because it is not a guarantee that you will save cash because of the service fees and other charges required by the debt aid company. Actually there is an option that allows you to lower the amount of money you owned by up to 50% but this only works if you have some savings to pay up for the lump sum amount. This is available through various debt settlement services and this usually goes hand in hand with consolidation.


As you can see, debt consolidation loans are not your genie in a bottle. You will still be paying the same amount but this time it’s faster. Consolidation is also used by many in the hope to lower the monthly payments they makes thus making the whole situation more affordable for them.  Although consolidation cannot guarantee you lower payment, it is still one of the best options if you want to pay off your debts faster in a more manageable way.