This is a guest post. If you are interested in guest posting, please feel free to contact me. I will accept guest posts from bloggers who want to share their stories about debt and finances, readers who have something great to say and from brands that have products that coincide with my blog. Enjoy this post from Jonny at FinanceWand
Managing your finances is a key in deciding how much you can save and spend every month. It is very important to be financially responsible if you don’t want to end up in debt. Being in debt is one of the easiest things now with the rampant usage of credit cards and the consumerism that has majorly engulfed the nation. When you incur debt, you realize how much difficult your life becomes. You have to keep a track of the monthly billing cycle, pay your bills on time and also interact with creditors when they call and inquire about your debt.
The main problem with unsecured debts is that they have a very high rate of interest which is why the debt amount keeps increasing. At such situations the best thing for you will be to get debt help. There are many debt relief options that you can go for. Amongst them credit card debt consolidation is one of the most convenient one.
What is credit card debt consolidation?
Credit card debt consolidation is a process in which all your multiple debts are merged together in a single debt and the interest rate on it is reduced. Credit card debt consolidation can be achieved in a lot of ways. Read about the processes in details below.
1. Debt consolidation program – This is a professional debt relief option of getting out of debt. In this process you enroll in a debt consolidation program offered by a debt consolidation company. As a part of this program, you will get a free credit counseling session on how to manage your finances and live within your budget. The company will also provide you with a negotiator who will mediate with your creditors to reduce the interest rate on the outstanding debts. Thus you can now make lower payments to get out of your debts. You can also make the total debt payments to the negotiator at the beginning of each month, who will distribute it amongst your many creditors. Thus you will be able to pay all your creditors with single monthly payments.
2. Debt consolidation loan – You can also consolidate your debts on your own with the help of a debt consolidation loan. A debt consolidation loan can be given by many debt consolidation companies; however the interest rate on this is not very low. A better option would be to take a secured loan as a debt consolidation loan. This can be best done if you own a property. You can take out a second mortgage on your property, which is a secured loan. A secured loan is basically a loan which has collateral. This means that, if you fail to pay back the loan, your property will be foreclosed in order to pay back the debt. This is the reason interest rate on secured loans are quite low, as they have a guarantee of getting paid back. Thus you can get a low interest rate and a single loan to pay back with the help of a debt consolidation loan.
Thus you can now pay back your debts easily with the help of credit card debt consolidation.
Jonny: My experience, knowledge and network of financial professionals makes me a more valuable resource for individuals and small businesses, I am trying to improve their current financial position as well as their future prospects. Check out my blog on personal finance and budgeting.
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Thanks Jessica for adding my post..
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Taking out a consolidation loan from the equity in your property should be thought through carefully. You’re essentially turning your unsecured loans into a secured loan. Going through a debt management program might be useful, but it’s important to note that all your accounts will be closed, but this shouldn’t be a problem if you’re serious about getting out of debt right?
Kevin @ SpringCoin(Quote)
The more I read, the more I wish people knew about debt management programs. It could really save them from getting even further into debt. We (my ex-husband and I) refinanced to use the equity in our home to pay off cc debt. Any guess what we did within a year?? We charged those bad boys right back up . A Debt management plan would have been so much better for us, having those accounts closed would have been what we needed. Like putting a 3 year old in timeout, we needed to stop doing what we were doing.
Jessica The DebtPrincess(Quote)
That’s the problem right? As soon as people see a “zero” balance, and see all this excess credit that’s available, they see this as “free money” that they can buy now and pay later.
Kevin @ SpringCoin(Quote)