Advice for consolidating debt
Debt consolidation is the act of rolling high-interest debts, such as credit card bills or loans, into a single, lower-interest payment.This helps reduce your total debt amount and it is structured in a way to pay the debt off faster.Make sure it makes sense before pulling the trigger.For example, one of my student loan is about 4% interest rate.Most of the consolidation offers that I receive are offering close to the same rate. There is no reason to have 2 BMWs in your garage while paying credit card debt.It was not worth it for me, so I decided not to go ahead with consolidation. You want compound interest to work for you and not against you.
You might have to part with some of your favorite possessions to gain your financial freedom.
Usually the loans require a certain monthly payment and it tends to have a time frame say 5 years to pay it off.
This means your monthly payment might actually be higher than what you currently pay, depending on the difference in interest rate.
This is an alternative to debt consolidation and it is commonly done by people with poor credit.
Usually, the debt settlement is handled by a third-party company. They will negotiate on your behalf with your lending company.