Debt consolidation – An opportunity to pay off debt and save money

One of the most popular debt solutions till date happens to be debt consolidation. It’s a rather simple process that enables you to pay off a number of debts in one go and you’ve got to make only one payment each month. This is especially beneficial if you’re struggling with multiple debt payments. Moreover, keeping a tab on several debt payments tends to take a toll on your health as well without really getting you anywhere as far as reduction in your debt burden is concerned. Read on to find out more.

The process of debt consolidation

Basically, the process of debt consolidation is nothing but the act of combining various loans and liabilities into one single loan. It can also mean the act of taking out a new loan to pay off a number of other debts. If you’re looking forward to consolidate your debts, then it’s best if you did it to attain a lower interest rate, or perhaps the hassle free dealings of a single loan.

Debt consolidation happens to be pretty common amongst individuals as well as companies. Companies which have credit card problems go forward and combine all their debts into one. This provides more ease in terms of repayment. Individuals find it advantageous for the same reason as well as for the fact that for debts like credit card, they can get the high interest rates off their back.

How to save money by consolidating debts

Consolidating debts into one monthly payment is rather beneficial, especially if you wish to negate the negative effect of debt from your life. One of the best methods of helping to alleviate the stress of debt would be to make the payment option more convenient. Debt consolidation helps you do that and it has also got the potential of saving money in terms of interest as well as fees.

1. Calculate outstanding debt: The very first thing you’ve got to do is calculate your outstanding debt. Go ahead and collect all your statements which list the secured as well as unsecured debts including your credit card debts and loans. Add them up and you’ll know the total amount that you owe.

2. Take out an equity loan: You could take out a home equity loan or a line of credit. In fact, use your home as collateral to get a secured line of credit. Try getting the best interest rate by applying at various financial institutions. It’s imperative that the loan happens to be greater or equal to your total debt amount, for that’ll enable you to make a single monthly payment.

3. Transfer balances to one card: As for your credit card balances, then try transferring all the balances to one card. There are quite a few companies which would offer no interest or low interest credit cards that are specifically meant to cater to the debt consolidation process.

New Year, Old Credit

It’s a new year and a new start.  The month of January is the busiest time for debts.  Most of the consumers enter this year with a bulk of financial hangover. The debt from the previous year is still up for the New Year. The bills for most of the credit cards will start to go out the coming days, and the rising cost of living is still evident.

About 1 million people have turned to high cost short-term loans to meet housing costs. Bills for credit cards and other borrowing will start to go out over the coming days, and could be the final straw for some people’s finances according to a housing charity Shelter.  Shelter had a live “Advice Clinic” last January 8 to help answer the readers’ questions about debt and how they can deal with it the best way they can.

According to Matthew Cooper from the advice charity StepChange, and Dennis Hussey, an adviser from the National Debtline, they would be willing to answer the consumer’s questions online.  Finance expert Andrew Hagger said that he can offer guidance in finding the right credit card or loans for your circumstances. He added “If your debt is less of a problem but you want to find out if you could pay less for it, our panel may also be able to offer assistance.”  This financial advice can somehow guide consumers on the usage of credit cards and for being trapped and in debt the whole time.  The more informed consumers are, the wiser they become and sooner find out that they could be free from debt.