It is rightly said, “A sick man sleeps, but not a debtor.” You too may have taken some loans, be it a car loan, business loan, credit cards, a bank overdraft or a student loan. The reason for taking loans could have been unexpected financial difficulties or business purpose. Don’t you want to get rid of all debts and the hassles involved in dealing with the creditors? Certainly, everyone wants to stay debt free. Debt consolidation can bring the normality back in your life.
The Biggest Advantages to Debt Consolidation
Although obvious to some, the advantages of debt consolidation often elude many people who have not had the luck to be educated and highly skillful in the art of finance management.
Following is a list of options that debt consolidation offers:
- Lower Rates And Greater Span
The first advantage of consolidation, the one that is most sought after, is the advantage of having the opportunity to decrease your rate. Be it because of financial problems, unforeseen circumstances or simply because of unwillingness to pay that much per month, the most important concern has a lower rate. In that case, debt consolidation can be a very good solution.
- Lower Rates And Lower Span
It is no secret that the longer your credit span is, the more you end up paying in the end. Debt consolidation offers another interesting and useful possibility: to be able to increase your rate, if you can afford it, but, at the same time, to make sure that your credit span goes down.
- Multiple Credits Advantage
When being faced with paying back multiple credits, the debt consolidation plan is certainly a great advantage. Say, for instance, that you have to pay credit with 20% interest, another one with 19% interest and another one with 10%. On average, this is a 16.3% interest (if the credits are approximately the same amount). By obtaining a debt consolidation plan with an interest rate of 15% (which is also high compared to the best credit you have) for the entire sum, you have not only reduced the interest, but you have also made sure that you will have to make a single payment instead of 3.
- Free Debt Counseling
The last and probably the greatest advantage you can get is free debt counseling. Remember, the bank is not your enemy. Many people who have not yet had the chance to become experts in the fine art of personal finance are in great need of such counseling, which is available for free when signing a debt consolidation.
Dealing with debt, with the help of debt consolidation, leads to financial freedom sooner. It enables you to pay back your debts, as your income permits and by a single payment.