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Debt Consolidation Is Great Debt Advice

Debt Consolidation Is Great Debt Advice


    

Debt Consolidation Is Great Debt Advice

by Liz Moir

A commonly used expression these days is debt consolidation.

Commonly used but what exactly is debt consolidation?

Debt consolidation is the term used when numerous items of different debts are lumped into the one debt payment monthly.

On hearing this explanation it may be tempting to think and even verbally to ask what can be the benefit of putting many debts into the one as surely that would only leave one big lump of debt that might actually sound more worrying?

Some may wonder what gain there is in debt consolidation, as after all debt is debt and nothing more or less.

The gains by arranging debt consolidation are great and save a lot of money in addition to tidying up the finances of an individual.

Take an example of a person with six credit cards. a personal loan, a car loan and a bank loan each month. When the debts were applied for he considered that the payments were affordable and individually they may well be but the total of debt to be paid monthly can become difficult to manage.

When a person decides to arrange debt consolidation it is obviously a fact that the debt as a total still exists but instead of numerous dates on which credit cards and loans must be made there is one payment in the place of many.

If someone is a homeowner the best debt consolidation method is by remortgages or secured loans which give one payment every month in the place of several.

Credit cards have interest rates of seldom less than 20% to up to and over 40%, personal loans will have an interest rate of about 15% or more, a home improvement loan when arranged by the home improvement company will have an interest rate of about 25%

On the other hand a remortgage currently has an interest rate starting at 1.98% and secured loans are available from round about the 9% mark, all going to show that debt consolidation is much more than the total debt may well remain the same after debt consolidation, but the person with the debts will have found a perfect debt solution, saving hundreds of pounds every month as well as making finances easy to manage unlike before debt consolidation.

About the Author:
Want to find out more about debt consolidation then visit Champion Finance's site on how to choose the best debt advice for your needs.


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