Will A Credit Card Debt Consolidation Company Work For You
Well, it’s always a pain to pay off multiple bills with varying interest rates. In a situation like this, a credit card debt consolidation company that offers a debt consolidation loan with a lower rate than any of your cards seems to be the ideal solution for you! And I won’t deny that getting rid of all your credit card debts and paying only one bill instead of multiple payments sounds really tempting. But debt consolidation comes with a lot of other conditions that may make things even more complicated for you! Let’s discuss such issues in detail and then you will understand if a credit card debt consolidation company can really solve your problem.
Do some maths
Calculate the interest rates of all of your credit cards and find out how long it’ll take to pay them off according to the current payment rate. Compare this to the amount that you will need to pay for the consolidation which you are thinking to opt for. If it’s a long period of 5 years, it may cause you paying more money than what you need to pay for the different credit cards.
Check the total monthly payment
Check how much you need to pay monthly for the debt consolidation. Is it more than that what you are now paying to repay the credit card debts? If yes, probably you should fork out some more money to pay off the credit card debts. The more money you can put on the sooner you’ll get rid of all your debts. If the payment is less than that of the credit card ones, you’ll end up paying lot more interests over time, as the loan repayment period will be a long one.
It goes on and on
If you are paying off the debt from your credit cards, you will cancel the cards once the payment is complete. But the problem with debt consolidation is it doesn’t help you to get out of the practices that caused you the debt in the first place. Instead it leads you to another huge amount of debt. If you think that you will use those cards after the payments are made or if you are considering debt consolidation as an easy solution to your budget, let me tell you that you are not on the right track. The worst that you can do is to apply for some quick cash to some reputable small loans company, pay all your cards and then charge them up again – now you are doubly trapped in the debts.
Having discussed the above factors now I would like to show you the other side of the story. If you are burdened with really huge amount of debts and know that it won’t be possible for you to negotiate the interest rates with your creditors, loan consolidation may turn out to be a fair decision for you. Also if you are supposed to pay too many bills and that too with high interest rates, a loan consolidation company can be of real help.