Going through debt is always a struggle for a lot of people. So when there are ads that mention that you will be debt-free and get lower monthly bills, the first thing that comes to the mind is that this could possibly be the answer to getting out of debt. It appears as if it’s a win-win strategy to the situation of debt. But, is it the ideal answer for you? What is Debt Consolidation? Debt consolidation is combining all debts into a single new loan that permits debtors to create one monthly payment on the total loan due them. An example is consolidating all your credit card payments into one, a suggestion most credit card companies promote to credit card holders. So, Why Consolidate? You will have lower monthly bills once you merge all of your loans into one with a lower interest. After consolidation, you don’t need to concern yourself managing several accounts wherein you need to monitor billing statements, payment dates, and just how much cash you must raise to pay these debts. In a way, getting through a single account relieves you from the stress of debt. Are there any Disadvantages? If you decide to enter into this arrangement, make sure that you carefully study the contract simply because you might end up paying above you expected. Paying your balance spanning a long period of time is actually raising the value of your total loan. You might also need a co-maker if you have a low credit standing on account of late payments.
Is Debt Consolidation a better solution? While it is true that debt consolidation helps you have lower monthly bills, it isn’t the answer to settling debts mainly because it will not immediately eliminate debt. The truth is, it involves you getting a new one. Debt consolidation is designed for borrowers that have a sound plan for getting out of debt and who foresee an increase in their income sooner or later. It is not for those debtors who do not change their spending habits. It will only camouflage the problem of overextending debts, having no money for emergencies, and living a lifestyle they are unable to have the ability to maintain. So before deciding to combine all your debts, take a closer look at the advantages and disadvantages of debt consolidation. Look into your spending habits, be determined and also have the discipline to stick to your allowance. It may take time but if you have done these, you will surely be debt-free. When the time comes that you have payed off every one of your debts, be sure that you sustain your good spending habits. Aim to have a debt-free life so you can begin saving for your retirement, have an emergency fund, save for your children’s education, or set aside funds for recreation and travel. Also you can think about keeping some funds for charity or investing your money in worthwhile projects. The Truly Rich Club teaches its members to keep themselves out of debt. It offers its members to grow their money in lucrative investments by providing them with information on which investment that suit them best. Want to join us? Log on to our website now! Please visit: http://www.trulyrichclub.ph/2014/05/debt-consolidation-solution-paying-debts/