These are some indicators that debt consolidation should be considered:
. Are your monthly payments higher than you are comfortable paying?
. Do you pay your bills on time but find your balance is not going down because of high interest rates?
. Have you fallen behind on your payments due to an emergency or unexpected expense and find it impossible to catch up?
. Are you struggling to remember which loan payment comes out on which day of the month?
. Do you use one credit card to pay down another?
. Are you finding it nearly impossible to keep up with your bills?
. Are you worried that your car or home will be repossessed?
. Do you make minimum monthly payments on your bills?
. Thinking about borrowing money to consolidate your debt?
. Are creditors and debt collectors calling to harass you?
If you answered yes to one or more of these questions then it is time to think seriously about debt consolidation. (See below for more information.)
Through debt consolidation you will be able to enjoy many benefits including:
. Monthly debt payments reduced and spread over a longer repayment period. Debt repayment is extended from three to five years to 15 years or more.
. Save as much as 10% in interest with a low interest rate. Pay off high interest loans (such as an 18% credit card debt) with lower interest loans.
. Cut multiple loan and bill payments to just one payment per month.
. Secure a lower long-term interest rate. This is a particularly good option if you believe interest rates will increase in the coming years.
. Free up cash immediately. Through debt consolidation you can pay off your debts and still have enough money left over to live comfortably.
. Make your monthly payments manageable.
. Access the money you need now for that significant purchase or special need.
. If you are anticipating a significant drop in your monthly income - debt consolidation may allow you to maintain your lifestyle and pay off your debts.
While debt consolidation can be the answer to many debt problems, it is very important to realize that it must be combined with a solid commitment to debt management. To keep your debts manageable you will have to resist the temptation to re-accumulate debt after all your miscellaneous debts are paid off with one long-term loan. A sound realistic budget can help your manage your debts and achieve the financial freedom you seek.
