If you struggle every month to pay off your Multiple Credit Bills and want to stop the harassing calls from your Credit Card companies, you can opt for credit card Debt consolidation. Today, in Australia, nearly 11% of the finance applications comprise of consumers who want to consolidate their debts.
What Debt Consolidation means
Your multiple credit bills will be consolidated into a single new Loan with a Lower Interest Rate. In some cases, your total debt amount may also be reduced. So, it will be easier for you to make a single payment every month. A debt consolidation loan has a fixed repayment amount and a loan term. Your total debt can be cleared in a shorter time and thus you will also save money. You have to do negotiation with your creditors for consolidating your debts. You can either approach them yourself or can take help of professionals, who will negotiate on your behalf with your creditors.
Pros and cons of debt consolidation
The main advantages of Credit Card Debt consolidation are:
What Debt Consolidation means
Your multiple credit bills will be consolidated into a single new Loan with a Lower Interest Rate. In some cases, your total debt amount may also be reduced. So, it will be easier for you to make a single payment every month. A debt consolidation loan has a fixed repayment amount and a loan term. Your total debt can be cleared in a shorter time and thus you will also save money. You have to do negotiation with your creditors for consolidating your debts. You can either approach them yourself or can take help of professionals, who will negotiate on your behalf with your creditors.
Pros and cons of debt consolidation
The main advantages of Credit Card Debt consolidation are:
- Single payment: Instead of multiple bills you have to make single monthly payment to pay off your debt. If you are making payment for multiple bills, payment for one or two bills can be missed. But, with the new loan you will only have to make a single payment, thus, there will be no chance of being a defaulter.
- Lower interest rate: The new consolidated loan will come with a lower interest rate, thus you will save money.
- Reduced debt amount: Your total debt amount may get reduced to 50% to 60%. It will depend how well the negotiation has been done with your creditors.
- Shorter loan term: You will have a shorter loan term to pay off your debt. So, in a shorter period you will be a debt-free man.
- No harassment calls: Once you opt for debt consolidation, your creditors will stop harassing you by making phone calls or paying a visit to your work place. If any creditor continues to do so, you can take legal action against him.
- Mental peace: Debt consolidation will help you to resolve your debts in a shorter time and your monthly payment will also be according to your affordability. So, you will not have any trouble making the monthly payments and can spend the extra money for your family too. Thus, you will have mental peace.
- Tax deduction: If you take a home equity loan, you can get some tax deductions from the interest amount you pay on mortgage.
