Guide to free debt consolidation
By Mansi gupta
There are innumerable people under debt who are plagued by the pressure of paying back their dues to collection agencies. This calls for consolidating their debts. Debt consolidation is a process that saves an individual from handling large debts of multiple creditors thru debt management program.
The debt management program helps to convert the credit cards, medical bills and utility bills debts into monthly manageable payment and also reduce the monthly payment.
In this regard several firms have come up who hire professional debt consolidation staff who first analyze the present debt amount and then negotiate a payment plan with the creditors to lower the interest rates and thereby reduce the debt amount. Late fees, penalties and hidden taxes are also waived off at times. The revised consolidated debt amount is then divided into easy monthly installments that make the repayment plans much easier.
The benefits of a debt consolidation program are:
• Elimination or reduction of past interest and penalty: In case of unsecured dues such as credit card dues, the amount due becomes much more than amount borrowed over a period of 4-5 years due to the interest and penalty charges levied on the amount over the due course of time. A debt consolidation program eliminates the interest and penalty charges on the amount borrowed. Now one needs to pay back only the borrowed amount.
• Consolidation of Credit Cards: Since people own more than one credit card at any point of time, they need to keep a track of payment of each credit card bill every month separately. In a debt consolidation programs all the accounts are consolidated into one account. So that only one bill is paid against all the credit card statements each month.
• Reduction of Average interest rate on the total amount: In case of different credit cards the interest rate varies from 8- 18%. When one goes through the debt consolidation program the interest rate on the consolidated account is much lower. The consolidated account might have an interest rate of only 8%. So the average interest rate for the unsecured debts is reduced significantly.
• Acquiring a payment plan depicting your payment abilities: With the debt consolidation program, the consultant first understands the persons needs and restructures the payment plan which suits the current payment capability of the person.
• Individual becomes debt free sooner: All the above benefits reduce the payoff time and thereby enable the person to repay the debt faster and easily. With in months this makes the person enrolled in the debt management program to be in control and debt free. In due course of time people are able to be fully debt free and earn better credit scores.
The increased demand for debt consolidation services has created opportunity for unscrupulous telemarketers. They exploit individual debt problems to their advantage and damage many people's credit in the process. A poor debt consolidation plan can leave one in worse shape than one was before the consolidation of debts.
It is therefore extremely important that one should understand the different types of debt consolidation services available today before rushing into blindly.
About the Author
Mansi gupta writes about free debt consolidation. Learn more at http://www.debt-consolidation-info-source.com .
Article Source: http://www.simplysearch4it.com/article/16515.html
|If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/16515.html" as shown above and make it hyperlinked.|
| Some other articles by Mansi gupta|
|Traveling tips in Europe|
Europe has always been a dream destination for tourists. With high skyscrapers, world's most beautiful beaches and rich cultural legacy, there is nothing more ...
Southern Comfort in elegant limousines
Limousines are the last word in elegant road travel. There are many services across America that run chartered services and you can charter ...
The Importance of Multivitamins and Vitamins for Women
Whether you're trying to have a baby, already pregnant, going through menopause or worried about osteoporosis, it's worthwhile for you as a woman to consider the importance taking a multivitamin to create and maintain optimal health. ...
Ma Huang - Chinese herb
Ma Huang, the native-Chinese herb used in fat-burning supplements and also known as Ephedra, has been used as a natural treatment ...
Hoodia - what it is, what it is used for?
Deep in the Kalahari Desert in South Africa a prickly like plant called Hoodia grows that could literally take your ...
Student loan consolidation guide 101
The constantly escalating fees as well as the competition in the field of higher education have made the life of a student ...