Tips for debt consolidation are all around the Internet. Most of these were written by people who recommend debt consolidation companies, but get compensated for doing so.
There’s nothing wrong with that. But YOU, as a consumer, should be more careful in filtering out the good and the bad information out there.
Here are some useful tips for debt consolidation you may want to consider first, before deciding whether debt consolidation is right for you.
You are perhaps considering debt consolidation because you have lots of credit card debt. You also want the convenience of paying only one debt instead of several, at a much lower interest rate.
Though it seems like a good idea in the surface, but there is a caveat.
Remember, credit card debt is unsecured debt. Unsecured debt is not tied to any collateral like your house or a car. When you default on paying your credit card debt, the credit card company or debt collector can only run after the amount that you originally owe plus interest. They cannot run after any other assets which you own as payment for your credit card debt.
One of the solutions that debt consolidation companies might lure you to make is to take a home equity loan to pay and consolidate all your credit card debts. It’s true that you will get a lower interest rate and the convenience of only one monthly payment to make. However, by doing this, you just shifted your debt from unsecured into a secured debt, collateralized by your home.
In case you defaulted on paying this loan, the debt consolidation company now has the right to sell your home in order to satisfy your financial obligation to them.
Another solution that debt consolidation companies might offer is to lower your bill into one affordable monthly payment. Again, it may look so tempting to do, but their agenda is for you to pay a lower monthly amount BUT on a longer term of payment. Instead of getting out of debt in 3 years...it may take you 7 years or more to completely pay off your debt. The longer the term of payment is, the larger the total interest payment.
As a consumer who is now facing debt problems, it is your duty to research all possible solutions available to you. These tips for debt consolidation are just the start of your research.
I am not a fan of debt consolidation. Merely transferring one debt to another is not the real solution to your debt problem.
Strive to Live Wealthier, starting today!
Subscribe to our Newsletter and we’ll send you Module 1, as a FREE GIFT, of our soon to be published book, "Live Wealthier: Achieving Your Ultimate Desired Lifestyle."
Subscribe to our FREE Newsletter and we’ll send you Module 1, as a FREE GIFT, of our soon to be published book, "Live Wealthier: Achieving Your Ultimate Desired Lifestyle."
We advocate starting a part-time home-based business to transition you from employee to business owner. Where to start? These are Programs we participate in and Each has our Highest Recommendation.
Leverage The Success of our Team. We’re Responsible in Disrupting an Industry. Application Needed. Not ALL Will Be Accepted.
There are some site-building tools available in the market which will help you build your site faster. My favorite though is Site Build It. SBI not only teaches you how to build a website, you will also learn how to make money from website that becomes a foundation of your internet business. I highly recommend you check out Site Build It.
The Live Wealthier "What's New" Blog is our way to keep you up-to-date on all our latest articles, so be sure to check in often!