Are your debts constantly threatening you? It all depend on how you manage your debt consolidation. Doesn’t worry here are 5 valuable tips on debt consolidation that you must consider so that you can relieve yourself from debt issues.
Debts can be wisely dealt with and managed with the proper skill to keep a constant track of what the debt charges are and its interest and paying the debts at a constant rate.
The majority of the people with debt get themselves involved on various problems as they have poor debt consolidation. The first thing to be considered about debt consolidation is:
1. Third party payment system
Getting tired and annoyed of changing between multiple accounts to bay your debts and charges? The perfect solution to this problem is to have a debt management plan, a third party plan deals with all the multiple payment issues and all you have to do is to make a single time payment to the credit counseling agency. This agency takes a list of all the creditors whose bills and debts have to be paid and settles them until the debts are settled completely.
These companies neither provide loans nor they settle loans on another behalf, many companies have tie-ups with other companies and that the firms do reduce the interest rates and fees, which can turn out into a benefit as your payments drift towards the balance, the interests keep diminishing. If your creditors do not offer any concessions then you might have to sacrifice all the benefit of having a third party payment system.
2. All the plans are same
Financial institutions do show differences in schemes from one to another but basically, all the plans are one and the same, the company provides you the loan of a certain amount based on your requirement and you may have to pay the entire amount along with a certain percentage of the interest to the company over a span of certain years.
Usually, you may have to pay around 2.5% of the total amount annually; this percentage gets multiplied depending on the number of years. You can pay the interest and the debt amount as per your desire and either finishes paying the money sooner to avoid additional interests.
3. Counseling before consolidation
What is the point having to consolidate the bills when cannot meet your personal expenses? A counseling before consolidation can save you from pointlessly spending more money. A counseling can help you to organize your expenditure and become financially assessed.
You should have some money left over after subtracting your expenses; your consolidations will be calculated along with other options. If you have too much cash left over after subtracting your expenses then, you can manage your consolidation on your own; a need for counseling is not required.
4. Simple and steady due
The due amount to be paid is always simple small amounts and they are same all through the loan period. The due remains constant, but you can pay different amounts the pending money will remain unpaid until you pay them.
5. Your work
Though you have a third party to take care of all your loan payment and procedures; you still have to constantly monitor the payments. And the records to keep a track of the number of dues and amount settled; so that you don’t end up paying more than required.
By following the above five tips, you can manage the debts more efficiently and handle them more effectively.