Debt Consolidation - A Key to Financial Freedom
The term "debt consolidation" is being used and abused by many banks and mortgage brokers in order to sell you a high-interest 2nd mortgage or to refinance your home. Remember, going further into debt does not get you the financial freedom you need. Debt consolidation enables you to solve the underlying problems of high debt without taking drastic steps such as declaring bankruptcy or committing yourself to a long-term debt consolidation loan. It is a negotiated agreement between you and your unsecured creditors.
Your creditors agree to:
- Cease all harassing phone calls or any other form of harassment.
- Reduce the number of your monthly payments to the one you can afford.
- Eliminate or reduce your high-interest rates.
- STOP late and over-limit fees, as well as, other charges.
How Debt Consolidation Works?
Debt consolidation is a financial strategy that helps individuals manage and pay off their debts more effectively. The basic idea behind debt consolidation is to combine multiple debts into a single loan or payment plan. By doing so, borrowers can simplify their financial obligations and potentially reduce the overall interest rates and monthly payments associated with their debts.
Debt consolidation can provide several benefits to borrowers, including simplified repayment, potentially lower interest rates, and the opportunity to pay off debts at a faster pace. However, it's important to carefully consider the advantages and disadvantages of debt consolidation and seek professional advice if needed. By understanding how debt consolidation works, individuals can make informed decisions to improve their financial situation and work towards a debt-free future.
The Benefits of Debt Consolidation:
- Payments are usually reduced by as much as 35%.
- Late and over-limit fees are very often eliminated by making regular monthly payments on time.
- Delinquent accounts become re-aged to their current status again enabling your credit rating to be saved.