Our Blog


Debt Consolidation: Taking Control Over Your Debts

Debt is usually defined as an amount of money that has been borrowed by an individual or a company from another. There are many types of debts that exist and some of them are debts from credit cards, overdue bills, cash loans, student loans and can also be any type of debt that uses one's assets as collateral – mortgage debts. Credit card debts can be incurred once you maxed out your credit cards and you are unable to pay them off in a timely manner.

Most of these cards usually come with double digit interest rate and carry over each balance each month could affect you with huge compound interest rates! Overdue bills could also be directly related to your utility bills. If you fail to pay them off promptly, not only does it add on accrued interest, utility services that have been extended to you may be completely cut off. Cash loans may be acquired to finance one's education when he or she does not have the initial sum that is required to commence their tuition courses in school. Most students who graduate often experience the initial shock of paying off their loans.

Mortgage debts surface when one chooses to use his or her real estate property to secure a particular loan. They are then obliged to pay the loan back in fixed or predetermined set of payments, and if they do not comply, their collateral will be seized. Individuals who choose to go for mortgage loans often use it to purchase new real estate property when they are unable to pay the entire value of their purchase up front. Below are the 3 worst problems that one can face when they are strung with multiple debts:

Over the roof interest rates

Certain types of loan or debt (credit cards) often allow really high interest rates to tag along – at least 25% for starters and increases when the debt snowballs. This is why financial experts recommend affected individuals to go for consolidation loans as they are the better option to go for: you may get lower interest rates when you pay off the loan, which can save you more money and resources in the long run.

Monthly instalments become less manageable

Individuals who are currently tied down with multiple debts, and need to pay their instalments at their minimum rates, may be more than what they can actually handle each month. The foundation of their financial burden may soon hit rock bottom when they start to miss their payments. These causes their interest rates to increase and they might find themselves drowning deeper into their pool of debts. Consider getting a consolidation loan to lower these monthly payment rates and give yourself enough time and space to get back on track if you might encounter any setbacks along the way.

Becoming more confused with multiple debts

Sometimes you might lose focus when you have several debts to handle at once. The separate bills that you receive may turn out to be confusing and you might mess up if you don't concentrate enough. You might want to narrow all these different debts into a single bill. That enables you to pay off your debts efficiently without experiencing any hiccups.

Debt consolidation to the rescue

Debt consolidation is identified as a process that combines multiple debts into a single entity and individuals may also enjoy lower interest rates. Affected individuals no longer have to pay to different accounts every month; they now pay to a single account. When your interest rates are lowered, your debt does not grow as fast and you can pay more of the exact sum as compared to paying off any accrued interest. You can use debt consolidation mortgage to regain control over your missed payments and you might not even need to declare bankruptcy under extreme circumstances.