“Until Debt Do us Part”
There is a high chance that you not only have debt, but that it’s spread across a multiple financial products – credit cards, a car loan, and maybe even a personal loan. The interest rates on each of those could range from six percent a year to a whopping 19 percent per year. And on top of that, your brain is probably thinly spread already, having to keep track of all the various payment schedules.
This is when consolidating all your debts makes a lot of sense. Especially if you have multiple credit and store cards. On an average, you probably pay 15 percent or more in interest on some of those cards. Pooling all the debt together, getting them repaid by one debt consolidator, and then repaying a single creditor at an interest rate of, say, eight or nine percent is often a better economical choice. Besides, having a manageable debt repayment schedule also improves your credit score.
Please remember that consolidating debt does not mean that you have dealt with the root cause of why you are in so much debt in the first place. You are only restructuring your debts – not paying them off. You want to ensure that you do not repeat the same cycle.
If you want to further reduce the overall interest amount, then opt for shorter loan schedules. The combined interest and principle on the loan will be translate into high repayments, but you’ll become debt-free much sooner.
If you’d like some more information about credit repair, check out these resources: