The average American has approximately 4 credit cards with around $6,000 in debt. Although many have much, MUCH more than this. When you are trying to pay off your credit cards, you wouldn’t just be looking at the overall payment, but rather the interest rates as well also. If you are paying on a card and your interest rate is through the roof, you are likely only paying on interest if you are paying your monthly minimum.
Consolidating your debt can help you to potentially minimize your monthly payment but also drastically help you to minimize the interest you are paying out. If done correctly, this could save you thousands of dollars over the life of your loan and credit repayments.
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I have invited guest contributor Daniel Ng here today to share his insights on how to use debt consolidation to minimize your overall payments and actually save money in the long run.
Debt Consolidation – Can it help you save?
Money has always been the most fascinating and magical thing to human since ages. Those who find ways to earn quick, get ahead in the race and some stay at 9-5 jobs and just spend their whole life by just keep working all the time. On the other hand, there are many minds that learn the art of investing. They invest, get their money multiplied and moved out of the race.
Other than investment, there are many places where your money can stick. When discussing investment, a word that is always attached to it is “Debt.”
Some people invest, but those who do not invest and do jobs, they take credit cards and loans to fulfill their needs. Taking loans and credit cards sounds fascinating initially, but it comes with risks as well as it needs skills, sharpness and constant eye on the interest that you pay.
Do you have a debt on your shoulder?
Debt is a term that every 2nd person who earns has on their head. There are millions of users who have debt on their head and do everything best to clear them. This debt comes when money is either invested somewhere or purchased when you use your credit card. Bills keep on increasing, and you have multiple payments to be done at the end of the month. This makes your life harder, also stressing you about clearing the bills and keeping track of your due dates.
If the due dates are not tracked by you, it piles up different interest amounts, and you end up paying more amount than your actual debt. But it is not that there are no solutions to come out of this loop.
How can you negotiate your debts?
There are few methods and relief funds which are available to provide help to you to negotiate your debts and help you in the best manner to move out of the loop of debt.
So, when you decide to move out of the loop to clear your debts as soon as possible, isn’t it a better option if you can just pay a single amount to one of the debt collectors and they’ll do the rest. Just like you are paying different interest rates to all, why not pay only a single interest to one company and let them manage the rest of the parties. This practice is termed “Debt Consolidation.”
Debt consolidation means combining all your debts, installments, loans, bills and credit card payments to one only debt, in order to quickly clear all loans at as low interest as possible. Debt consolidation is currently the best method if you look to clear your loans without any hustle and save as much as you can on the interest.
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For example, if you go with the conventional method of repaying your loans and bills separately every month for a debt of $10.000, your overall interest may count up to 30-40%, i.e. $4,000. But, if you choose to negotiate your debt by choosing a debt consolidation program, you will be paying interest of only 12-13$, i.e. $1,200. This way you will save almost $2,800.
There are many factors that need to be taken considered while choosing a debt consolidation plan, let us review the factors:
- Choosing the best firm available for the program: Recently, you will find many firms in the market that offer you less interest rate on the debt consolidation plan. But you need to make proper research on your debts and the methods that the firm is using to bring you out of this loop.
- Don’t go for cheapest: Many firms provide cheap rates on debt consolidation, but you should play smart here and research on the history and track record of the company in clearing the debt of previous customers just like you. Don’t become a fish for them. Step in the market and find out the firm with the best reviews and ratings, also giving you the best rates at a good rating.
- Choose the debts to be merged: Either you can merge your bills in one plan and loans in another plan, or you can merge all in one. You need to make a calculation and find the best way to save as much money as possible. It is always better to keep all debts including loans, credit card bills and medical bills in one merger.
- Consider the payment to the firm in consolidation: When you choose to opt for debt consolidation, you need to pay a certain amount to the firm as well doing it for you. Thus, considering that amount also in the merger is most beneficial.
Now that we have understood the factors that help you decide, there are firms that offer you the best service to fulfill this aim. One trusted organization is National Debt relief. You can visit them at nationaldebtreliefprograms.com
Let us understand the benefits of choosing National Debt relief over any other firm and how they can offer top benefit to you in clearing your debts:
- No payment if no reduction: They provide you assurance to reduce the debt by consolidation. If they are not able to reduce the debt for you, you do not owe a single buck to them. This guarantee that debt reduction solution will be provided to you in any case.
- Create a payment plan for you: They offer to design a payment plan and payment cycle for you so that you can pay the monthly amount that is affordable to you. This will help you clear your debt as well as live your life more comfortably.
- Rates that do not put you back in debt: They offer you a decent rate of interest for their service that is always affordable to you as per your ability to pay. They aim to bring you out of debt and thus let you pay them comfortably so that it doesn’t become a problem for you instead of the solution.
Debt consolidation has majorly come up as one of the most effective solutions in clearing the debt. It is a solution not only for you but for credit companies as well. Most importantly, this solution will generate improvements in your credit score as well.
Daniel Ng is a freelance writer who has been writing for various blogs. He has previously covered an extensive range of topics in her posts, including business debt consolidation, Finance, E-commerce, and start-ups.
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