Internet's first get-out-of-debt community - 136,000 members

If a consolidator and a creditor agree on an interest rate and it's LESS than the rate I am paying now, what happens to the remaining interest rate? ie. If I am paying 25% and they take it down to 11%, what happens to the14% that's left? Does it keep builing as a debt that I will need to repay?

Posted: Fri Jan 06, 2006 3:44 pm Subject:

carissa,
If you had 25% interest rate and the consolidator got it reduced to 11%, I believe from that point on the interest that keeps building is only 11%. When they reduce it the 14% doesn't exist anymore. Does that answer your question or were you trying to ask something else?

Hope that helps.

Posted: Fri Jan 06, 2006 4:32 pm Subject:

Carissa

The advantage of debt consolidation program is that your debt gets reduced in every possible ways. Financial charges, late fees are waived off so that the total amount becomes much easier to be paid. Besides the rates of interests also go down after the consultant does tactful negotiations with the creditors.

Since the credit company will now be getting their money back from you, which otherwise could have become charged off, they are willing to offer some facilities. As they are the ones who charged interests in your debt, it is not a problem for them to slash it down.

You will only pay that much amount that has been offered in the program. The remaining balance will be wiped off and you won't have to pay it later. Just be sure to continue making the payments set in the plan. The benefits that have been offered to you now will be withdrawn if you miss any of the payments.

Posted: Fri Jan 06, 2006 8:48 pm Subject:

debt consolidation has helped me a lot and there is no tricks or anything...there is a lot of positive feedback from the forum so you should at least talk to a counselor and they will be happy to explain all the benefits and see if debt consolidation is a correct choice for you.

Posted: Sat Jan 07, 2006 10:29 am Subject:

carissa, most of us have multiple credit cards with different lenders. The rates of interest vary from 8% to 18%. When you miss the payments due to financial problems, the due amount becomes much higher than the borrowed amount in a period of time. This is because of the high interests and penalties attached to the credit card accounts. debt consolidation program eliminates the past interests and penalties. The rates of interests can be lowered significantly to 5 % at times. You don't have to pay the waived off amount that has been excluded from the total debt. This is a type of benefit creditors offer you when you take the responsibility to pay your bills. Be sure that you don't miss the payments when the plan has been set.

Posted: Tue Jan 10, 2006 3:38 pm Subject:

The interest is what kills you...I was late one time on one of my cards and it broke some aggreement and the apr shot up so high.

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