Juggling with too many debts can be very stressful. Remembering the details of every payment due – the amount, the date, the creditor – soon tends to show its effect on our personal and professional lives. It doesn t do too well for our credit scores either. Professional debt consolidation can be very useful in such situations.
What Is Debt Consolidation?
Research indicates that an average American holds roughly $9000 in just credit card debts. Apart from that, there are housing loans, car loans, education loans, medical bills and even pending utility bills. Debt consolidation combines all these varied debts into a single loan offered by a professional third party – very often a non profit company.
Benefits of Debt Consolidation
The main benefit is, of course, peace of mind. When we aren t bogged down by half-a-dozen payment schedules to remember, we can concentrate more on earning. There is less possibility of missing a payment and accruing fines and penalties. Also, there are no more harassing collection calls to attend.
More importantly, these debt consolidation companies usually negotiate with the creditors, and get lowered rates of interest or a reduction in the principal amount. And the credit rating companies also read this move as a positive sign towards achieving better financial status.
Better Financial Future
Some loans are at a higher rate of interest than the others. When a debt consolidation company steps in, they try to renegotiate the terms of such loans, seeking for an early settlement. They also try to get extended payment plans for other loans, at a lower interest rate. Smaller aggregate monthly payments lead to fewer/no defaults, which greatly boosts up the credit scores. The debt consolidation companies also offer free debt counseling and training on how to manage finances better in future.
A sustainable improvement in finances requires a practically feasible plan and committed efforts towards making it a reality. There are several how-to videos on eWisdomtv that help you gain a better understanding of debt consolidation.
The Business and Money section features several informational how-to videos that can give you the correct guidance to become completely debt-free in time, and enjoy a healthier financial future.