Debt Consolidation; Alternative Method in Paying off your Credit Liabilities

One good way to pay off all your debt is to consolidate all your payables into a single debt. This is called debt consolidation wherein paying your CREDIT liabilities will be more manageable. This is done through the reduction of the interest paid on the total debt. Once consolidated, the borrower will only have to remit single payment per month for all the credit liabilities. The general principle for debt consolidation is to get a new loan from any legitimate MONEY LENDER to cover all of your existing debts thereby leaving you with a single loan to manage. By doing this, you actually reduce the interest cost of your liabilities. This is because the amount of interest for a single loan is a lot smaller than the combined rates of your previous debts.

 

How to Consolidate your Debt

 

You can consolidate your debt by shopping around for banks and other financial institutions that offers low interest loans. The setback here is if your consolidated debt is big, you might need to secure your loan with any of your hard assets. Another way is to ask for assistance from debt relief companies. Here, credit counselors will enroll you in debt management programs suited to your financial problems. The counselors will then work with your creditors to find out ways on how to at least lower the interest rates of your debts. They are quite effective on this matter. Statistics shows that they can reduce the interest on the debt by as much as 6 to 9%. Once an agreement has been reached between your creditors and your debt management company, you will remit to the latter single payment each month for the consolidated debt. In turn, your payment will be distributed by the debt management people to the various creditors that you owe money to. Of course you would also have to pay a certain fee (which is quite reasonable) to the management company for their services. The use of Debt management companies is highly recommended because of their 70% success rate in assisting borrowers to manage their financial debts.