So when you get a debt consolidation loan, you can look forward to a certain amount of personal attention.
Pro #2 — Interest rates are usually pre-set by creditors, so the debt consolidation firm handling your loan can definitely get lower interest rates and reduce (or even eliminate) late fees better than you can.
Cape Town - Over-indebted consumers have various options to choose from to help them on their road to financial freedom, one of which is debt consolidation.
In a nutshell, debt consolidation involves taking out one single loan to settle all your other loans.
Pro #3 — If you've had past credit problems, creditors are likely to hassle you less if you're working with a debt consolidation firm.
If, for example, you do start to get calls from creditors, a reputable debt consolidator will often be willing to speak on your behalf. For example, when you go with a debt consolidation plan, you're required to stop increasing your overall debt, which often includes limiting the use of your credit cards.
These articles provide you with factual information only, and are not intended to imply any recommendation about any financial product(s) or constitute tax advice.
If you require financial or tax advice you should consult a licensed financial or tax adviser.
Paying off short term debts like credit cards and personal loans over much longer periods, even at a slightly lower rate, actually means paying a lot more interest in the long run.Here are some things you should consider before applying. If you’re struggling with credit card debt or have difficulty juggling payments on multiple loans – each with specific interest rates, conditions and balances – you may want to consider consolidating your debt.Debt consolidation basically means collapsing all your existing debts into one new debt.Although the lower monthly instalment may give you short term breathing space, it will keep you paying interest for up to twenty years.• It can lead to more debt.Debt consolidation can cause the illusion that debt is being paid off.