Consolidating Your Credit Card Debt
Under a debt consolidation plan, terms and conditions change, it
will allow you to pay your current debts in 3-6 years. The
purpose of debt consolidation is to speed up your paying time
and at the same time makes lower monthly bills.
You have to make sure that the new cost of the consolidated loan
is truly less than what you are currently paying for to the
various creditors. Not getting the lowest available interest
rate has always been a problem faced by consolidation loan
applicants. Be sure that there is something to secure the loan
like your house for example.
It is highly recommend you to calculate the interest and the
fees of all your existing accounts to see the total payments
you're making at present. After computing this, compare the
figure with the consolidation loan amount. This will determine
if you're making a better choice or not. Be sure to make your
deposits on time, if you are already under a consolidation loan.
This will assure your creditors that you really intend to pay
for your debts. Having delayed payments might cause the
creditors to resume the normal collection activities and what's
worse, they might turn it back to the regular interest rates and
fees.
Be sure to keep in touch with your consolidation representative.
There may be instances that your account will be turned over to
a collection agency. Keeping your agent updated on the changes
will help you solve your problems.
Pay your credit to your consolidation company. They are the ones
that divide how much goes to each creditor.
Always check on your creditor's statements. It is your duty to
monitor the monthly statements sent to you by your creditors.
Check if your creditor has reduced the rates. They should also
have the late fees stopped. Also check if your debt
consolidation company is paying your creditor the right amount.
There are many types of debt consolidation loans available.
There could be a loan that would take you a longer time paying
but has a higher interest rate. There are also loans that offer
short payment duration and a lower rate of interest. If you
could not pay for a larger amount every month, you could choose
consolidation loans that offer a longer plan.
There is the variable rate debt consolidation loan that allows
you to make extra repayments anytime with no extra cost. However
a fixed rate debt consolidation loan will only accept fixed
repayments for the duration of the loan.