Learn everything about debt consolidation to get control over your finances

Learn everything about debt consolidation to get control over your finances

Is it becoming difficult to manage your different credit card bills and loan payments every month? In that case, you can look for consolidating your debts, i.e., combine all the payable amount into one monthly cycle through a larger loan. For this, you can take the help of a trustworthy credit counseling service provider whose expertise lies in simplifying or reducing the burden of your payments. But make sure your credit counselor is licensed by one of these authority bodies to avoid the risk of scams or fraudulence:

    Financial Counseling Association of America (FCAA)

    National Foundation for Credit Counseling (NFCC)

With assistance from an accredited specialized financial agency, you will be able to deal with your finances well, get breathing space by freeing up a few of your paychecks, and bring down your stress. While you’re at it, do everything in your control to reduce your expenses. That means eating out less, looking for coupons and deals, and not buying things that aren’t necessary. Wait until you’ve gotten your debt under control first.

How consolidating your debts can be beneficial for you?

It’s not easy to get rid of debt as much as getting into its habit. But before it wipes out all your savings, and brings you to a situation of losing your property, you need to take appropriate action. With a debt consolidation payment plan, you can take care of your credit card and medical bills, cash advance loans and several other personal loans in a much efficient manner and keep the financial woes at bay. You may wonder ‘’how.” Here is a quick overview of the benefits that you can expect to enjoy after your debts are consolidated.

Lowers the monthly debt obligations

Generally, people spend hundreds of dollars from their monthly budget to pay for their consumer debts, which in essence, erode their savings. As you may be aware, there is a fixed minimum monthly payment that you have to make for a credit card, regardless of the balance. Sometimes, this payable amount can be a bit more than your interest rate when it is applied to your principal balance. But you can take care of these instances by clearing the debts with a debt consolidation loan. You will have a new g balance with a much less monthly amount to be paid. And you may have to pay even less if your counselor succeeds in negotiating a lower balance amount for you.

In some cases, you may not be eligible for a loan. But then also, your chosen agency may assist you with a program that needs you to make your debt payment one at a time. It may help you save some money for the other debt payment and eventually, free up your earnings. They can also get you lower interest rates so that the maximum amount is applied to the balance. As a result, all the debts will be taken care of, and your monthly bills will also come down drastically.

Removes debts that incur high-interest rates

On average, 15 to 18% is the interest rate on credit cards. If most of your payment obligations are credit or charge cards-based, then you are most like to pay excessive interest rates every month. Another instance can be car loans, which cost about 1 to 7% interest rate on average. The charges can further vary depending on whether you bought a new or used vehicle. Again, the period of loan repayment you choose matters here. Typically, the new car loans have a duration of 6 years and old car loans, three years.

Now, in case your credit score was poor at the time of credit card or loan application, then the rate of your interest amount shoots up to 10% for a car and 25% for a credit card.

These payments can be paid off with the help of a debt consolidation loan. And by chance, if that doesn’t happen, you can still reduce your monthly payment with a new interest rate that becomes effective with the single, large loan. And as a consequence, you still get to save your income.

Secures your creditworthiness

The health of your debt payments reflects on your credit rating. Whether your credit score is good or bad is determined by the credit reporting agencies, which have full access to your payment record.

Anyone with a bad credit report typically faces a problem with payments. One has to pay extra for every delayed payment. With time, these late payment charges and bill payments pile up, making it harder to pay further.

The credit agencies have all the records of the late payments. So, the number of times you fail to make timely payment or your bills remain pending for more than 30 days, you risk your credit score for negative marking.

If you don’t pay a bill at all, it will further go down. The disappointed creditors can charge off your account on the grounds of non-payment and file your case with the credit score agencies. This report and the history of delayed payments will reflect on your credit rating for seven years. If some company files a legal complaint against you for not paying their bills and wins the case, then the judgment will show on your credit file for the upcoming ten years.

Having a healthy credit score is crucial for so many reasons. Whether you buy a home, a car, or apply for a student loan for your wards, the credit rating will impact all of it. With the assistance of a trusted debt consolidation company, such as Nationaldebtrelief.com, you can satisfy your creditors by negotiating a manageable payable amount with them or paying the dues so that they report your bill status as cleared, which in turn, will have its positive effect on your credit history. And as soon as you remove all your debts, the rating will also improve.

There is no doubt that a good debt consolidator is all you need to come out of your bad debt problems. But you also need to take charge of your situation sometimes and don’t let anyone take advantage of it. For that, even if you are in distress, you need to have a fair understanding of your rights and privileges so that no one else can harass you, such as creditors as well as debt collectors.

Points to remember when dealing with a debt collecting agency

A creditor may hire a debt collector to recover his money from you. Usually, a debt collecting agency needs to post a written notice to you containing the details of your creditor, the amount of payment you need to make, the steps that you can take if you think you don’t have a particular payment obligation. This written communication should reach you within five days as per usual standards after he meets you. If you are indebted to the company, you will have to pay. If you are not, then you can inform both the parties through written communication to not contact you.

Here is a quick look at a few of the practices of these debt collecting agencies that you don’t need to tolerate. 

  • Reaching out to you before 8 am or 9 pm without your permission
  • Coming to your office even after you inform him about your employer’s disapproval about it
  • Contacting you after you notify them not to visit you for collection, except when it needs to tell you about any particular action that either your creditor or he intends to take against you
  • Getting in touch with your family, friends, and employers to obtain information about you other than where you work or live.
  • Calling you multiple times, threatening you, or using unacceptable language
  • Intimidating you with false statements, such as you will be sent to jail
  • Telling you that they will sue you or deduct the amount from your paycheck without having any legal base

If you face any such issues, you can report the case with Consumer Financial Protection Bureau, the Federal Trade Commission, etc. Since rules may vary from one state to another, you can visit the State Attorney General’s Office to get information about your right in such matters. However, make sure you first speak to your lender about it, and if he doesn’t do anything, then you approach these higher bodies.

Get rid of all the troubles with debt consolidation

From all this, one thing is clear that a perfect way to find relief from the pressure of your unsecured debt payments is debt consolidation. A debt consolidation company can help you manage every problem around debts, be it creditors or debt collectors, by applying their unique expertise and knowledge. If they are well-established in their area of work, you can benefit from their professional advice in multiple ways, such as:

  • Debt clearance
  • Application for a debt consolidation loan
  • Debt settlement
  • Debt calculation
  • Payment towards the principal balance

So, if you are worried because of the growing interest rates and continuous late payment on your loan or credit card, then do get in touch with a reliable debt consolidation service provider before the problems intensify and make you lose everything that you earned with your efforts.

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