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Debt consolidation: 5 Ways to repay unsecured debts and save dollars

DebtCC - Your first step to success (By Michael Bovee)

When debt consolidation plan is right for you

  • You have to pay only once every month
  • You can save on interest rates and monthly payments
  • You can get out of debt quickly
  • You don't want to pay extra fees and penalties

How you can benefit from it

  • You can handle credit card debts smartly
  • You can save a lot on interests, fees and fines
  • You're likely to receive less collection calls
  • You have to pay less to creditors every month

Debt consolidation - Is it good for all? How does it work?

Debt consolidation is good for those people who are unable to pay off credit card debts, personal loans, payday loans, private student loans and medical bills due to costly financial mistakes. This debt relief option is good for those who want to pay off unpaid debts, manage multiple bills efficiently, pay less on interest rates and save money. Know more about its pros and cons...

Let us see this example to know how debt consolidation would work for you.

Your total credit card debt (20%) - $25,000
Your outstanding balance on a payday loan (10%) - $15,000
Your outstanding balance on a personal loan (15%) - $20,000

So, your average interest rate (20% + 10% + 15%)/3 = 15%

After you consolidate your debts, your interest rates are lowered to:

Credit card - 15%
Payday loan - 8%
Personal loan - 10%

So, the new interest rate is (15% + 8% + 10%)/3 = 11%

This implies you're paying 4% less on the interest rate.

If your total debt is $60,000, then you'll save (4% * 60000) = $2400.

How much
debt consolidation
can save you

What to do before you consolidate your debt

1 Get Free counseling

Get a no-obligation FREE counseling session from an experienced financial counselor. Figure out how much you can pay and save on your debts.

2 Choose the right plan

Discuss your debt problems with the counselor. Explore your options. Choose a plan that will help to simplify and lower your monthly payments.

3 Pay off your debt

Have a talk with a budget consultant every month. Start making payments as per your new monthly payment plan and be debt free soon.

Eliminate your unsecured debts with different types of debt consolidation

Debt consolidation program

This is where the experienced counselors of a debt relief company help you organize an easy and budget-friendly single monthly payment plan. With this option, you replace your multiple credit cards and other bills with a single monthly payment. It helps you pay off your debts within a certain period.

Debt consolidation loan

This is where you take out a personal loan from a financial institution, such as a bank, to pay off your multiple creditors immediately. Through this loan consolidation option, you make one consolidated low monthly payment on the new loan. You can obtain this loan with easy terms if you have a good credit score.

Payday loan consolidation

This is where you can consolidate your multiple payday loan debts with a simple payment plan at a low-interest rate. You don't have to pay extra dollars for fines, high-interest rates and penalties. Just follow the new repayment plan that fits your budget. You'll be out of vicious cycle of payday loan debt soon.

Credit card consolidation

This is where you can pay off your high-interest credit card debts with an affordable payment plan. Late payment fees and penalties are dumped. All you need to do is pay a small amount every month to a debt consolidation company and rest in peace. The consolidation company will manage your credit card debts, collection calls and payments.

Manage your money with these debt relief plans

Apart from consolidation, you can choose 4 other debt relief plans to achieve financial freedom. Check out the plans to know which one will be best for your situation.

Debt Settlement

This option can help you take control of your financial life by paying a reduced amount up front. You can use a debt settlement calculator to find out how much to pay and save.

Debt Management

Through this option, you can replace your multiple bill payments with a single low monthly payment. You also get a smart budget plan and education to reduce expenses.

Interest Rate Arbitration

In this process, you replace your unsecured bills with a secured loan at a low interest rate. So, you can repay multiple debts at a low rate and lower single monthly payments.

Bankruptcy

This option can help you get your financial life back in order and you can start afresh. You can initiate this legal process to get discharge from your multiple debts.

Eliminate your credit card debt with the help of financial resources