Debt consolidation is the most common means of paying off certain kinds of debt, such as student loans.
Why Use It?
It’s often easier and a much more practical solution to paying off debt by combining all of one’s debts into one. The debtor receives only one statement and makes only one payment, meaning you won’t forget to pay anyone at the start of each month.
It gets even better; the amount of monthly debt that one has to pay actually decreases because the payments are stretched over a period of time, with less being paid out in each installment. Since you have only one loan to manage, the task of budgeting becomes easier, and interest rates will often be lower than for credit card debt or hire purchase.
Things To Remember
The way in which payments are made under debt consolidation can create the illusion that the outstanding debt is less than it actually is. It can be tempting to use the remaining credit, but doing so will only get your further in debt, which would be counterproductive to having your debt consolidated.
And while you’ll be paying less out every month, the total amount of interest you’ll be paying on your debt may be higher than some of your cards.
Despite this fact, consolidation can often be the most effective way to pay off outstanding debts. It’s important to remember discipline and self-control if you have your debts consolidated, as it’ll pay off in the long run.
To find out how you can consolidate your debt with First & Second Mortgages today at (403)543-0927.