Everyone seems to be talking about debt consolidation these days but most of us don't have a clue what debt consolidation really is or how it could potentially benefit us. Debt consolidation is when you obtain a new loan that takes the place of your current debt. Sometimes it's a great choice and other times, there are other solutions to check out before consolidating your debt that way. So let me give you some more information so you can determine if it's the right choice for you.
Keeping track of multiple due dates and how much you pay on each and every loan or credit card can not only be exhausting but also overwhelming. Sometimes it's such a process that people can't even deal with it and they start missing payments. When you consolidate your debt you end up with one monthly payment you have to remember each month and you have an entire month to get that money together. You can even get a lower monthly payment if you choose a lower interest rate or a longer plan for paying back the loan, even if you know you can pay it off sooner. A longer loan period can leave you with extra money each month that you need to pay your utilities and buy necessities like groceries and gas for your vehicle. Sometimes you can even choose your own payoff date with a debt consolidation loan.
Remember that a debt consolidation loan can have an origination fee, which is typically 1-6% of the total loan amount and gets taken out of the loan funds before you even get them. Make sure to take that into consideration and make sure the amount you borrow is enough to cover your debt AND the origination fee.
If you never change your behavior that has brought you into debt, you'll never actually become debt free. You need to take a long hard look at your spending and saving habits and ensure you are doing the right things to stay OUT OF DEBT. This means you can't get into any new debt! Make sure you get a on a budget and figure out a more responsible way to spend money each month. You should have a system in place to track your spending and even your debt payoff progress. It's WAY too easy to get into debt and it can be VERY difficult to get out of it.
Make sure you speak to a professional to get more information and see what works best for your specific situation.
Are you considering debt consolidation?
What is debt consolidation with Second City Advisors?
Debt consolidation allows you to get a single loan for your multiple piles of personal loans and credit card debt and lets you pay it off with a plan. So basically taking out a debt consolidation loan allows you to get a payment plan with one due date rather than several due dates through out the month, get out of debt at an earlier date, and avoid high interest rates.
Since a debt consolidation loan is considered a personal loan, you can get a lower annual percentage rate (APR) than you could with a credit card. Technically, you're moving your high interest rate debt to a lower interest rate and grouping it together which will definitely save money in the long run.
Remember that a debt consolidation loan can have an origination fee, which is typically 1-6% of the total loan amount and gets taken out of the loan funds before you even get them. Make sure to take that into consideration and make sure the amount you borrow is enough to cover your debt AND the origination fee.
If you never change your behavior that has brought you into debt, you'll never actually become debt free. You need to take a long hard look at your spending and saving habits and ensure you are doing the right things to stay OUT OF DEBT. This means you can't get into any new debt! Make sure you get a on a budget and figure out a more responsible way to spend money each month. You should have a system in place to track your spending and even your debt payoff progress. It's WAY too easy to get into debt and it can be VERY difficult to get out of it.
Make sure you speak to a professional to get more information and see what works best for your specific situation.
Are you considering debt consolidation?
| FOLLOW ME ON SOCIAL MEDIA |
No comments:
Post a Comment
I love reading and responding to comments but in order to get my reply you must ensure you are NOT a no-reply blogger. If you are, here are some quick steps to change that!
1. Go to the home page of your Blogger account.
2. Select the drop down beside your name on the top right corner and choose Blogger Profile.
3. Select Edit Profile at the top right.
4. Select the Show My Email Address box.
5. Hit Save Profile.