Obviously, you won’t get into debt consolidation if it doesn’t help you save money. But how does it work? Does it really help you get your life back on track? If yes, then how? Let’s find out.
How does debt consolidation work
But before we dig deeper into debt consolidation basics, let us know what it is and how it works.
Debt consolidation program: Here you consolidate credit cards, payday loans, medical bills, unsecured lines of credit and collection accounts into an easy and affordable payment by enrolling into a program offered by debt consolidation companies.
How does it help you save money?
A debt consolidation program helps you save money by:
Lowering your interest rates
Lowering your monthly payments
Waiving off late fees
Waiving off penalties and extra charges
How does it differ from debt settlement?
The difference lies in the mode of operation and their effect on credit score.
In debt consolidation, your payments are disbursed amongst creditors as soon as you start making payments. It will help to raise your credit score with time.
In debt settlement, your debts are negotiated as soon as you save around 50% of your outstanding balance in a dedicated account. Initially, it won’t help to increase your credit score.
Scam debt consolidation firms mainly hunt on people who are desperate in search of a way out to their mounting debt problems. People whose credit scores are bitter or already ruined often fall prey to debt consolidation scams.
While the legitimate ones help you keep calm and stay afloat, the scam [...]... Read more
For many years now, debt consolidation loans and balance transfer methods have remained the sole resort for numerous debt ridden individuals out there. These two debt relief ways boast of offering you the most convenient ways to get out of debt by offering a relatively lower, single and an [...]... Read more
1. How can you consolidate debts?
You can consolidate your debts on your own with a debt consolidation loan, or you can sign up with a debt management company that offers debt consolidation services.
2. What is a debt consolidation loan?
A debt consolidation loan is a low-interest loan that you [...]... Read more
Debt consolidation process helps to merge your multiple bills into a single low interest loan. Debt consolidation loans are available both as unsecured and secured personal loans. Here are some essential facts about debt consolidation loan given below:
Table of contents
When a debt consolidation [...]... Read more
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