Sometimes, people end up in a situation where they are making many different debt payments every month. The payments can have different interest rates and different payment dates. You can use different tools to lower your total payments, interest expense, and reduce the number of payments you make.
Interest Rates
You can use debt consolidation to take advantage of open credit lines with a lower interest rate. If you have several credit cards, you can do a balance transfer to move funds from a high interest card to a lower interest card.
If you own a home and have built up sufficient equity, you can open a new home equity loan (second mortgage) or home equity line of credit (HELOC). You can transfer the balance of the credit cards to a secured loan to take advantage of a much lower interest rate.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Number of Payments
I have two loan payments every month. The payments are about ten days apart every month. I have considered a loan consolidation to bring the payments together on one date.
The same can be done with any form of debt. There is a chance that your lender will allow you to shift your payment date if you ask, but not all companies are willing to do so. In this case, you can combine your payments with a consolidation loan.
How to Consolidate
If you decide to transfer credit card balances, your financial institution can assist you with a balance transfer. Beware that some credit card companies charge a fee for this, so analyze the savings to decide if it is worth the fee.
If you are consolidating with a home equity loan, your bank will work with you to consolidate the balances. When I worked in a bank, I did this several times for customers. Once you are approved for the loan, bring in payoff information to the bank, they will send a check to pay off every account you are consolidating.
Building a strong debt management plan is important if you are in a difficult financial situation. If you are unable to handle your current situation, you can get debt consolidation help. If you do, be sure to work with a trustworthy, reputable company that has your best interest in mind.
Debt Advisory Line is an award winning debt management companies; one of the largest in the UK. They’ve already helped thousands of people who thought bankruptcy was their only option. They offer professional debt management help and advice.
