Should I Consolidate My Debt

Debt consolidation can indeed be an alternative step taken by people who are trapped in debt. You can combine several debts into one, and get relief in terms of interest rates and monthly installments that must be paid. However, not everyone knows when is the right time to consolidate debt. Should I consolidate my debt, or should I wait until it is completely delinquent and consolidated?

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Debt consolidation is a step taken to make it easier for you to pay off a combination of several types of debt into one debt to a financing institution other than a bank (for example multi-finance or peer-to-peer lending companies).

Should I Consider Debt Consolidation

Debt consolidation is a practical way of settling various debts at once with a single payment.

In addition, debt consolidation means uniting all existing debts into one. Usually, all debts will be added up and the total amount will be made into a new loan, with a lower interest rate. Because all debts are combined into one loan, the repayment is only made in one payment every month.

Should consolidate debt?

If the monthly debt payments are large enough, loan consolidation may be an easy solution indeed. But first, try to consider how much total debt obligations you want to consolidate. Next to each debt, what is the monthly payment amount? Furthermore, how much is the payment for each debt? And finally, determine the time of what month and year will pay off each debt.

What are the advantages of debt consolidation?

If you have several types of debt with high-interest rates and large monthly payments, debt consolidation can be the right solution for you. By putting all debts together, you only have to pay one interest and can ask for a longer installment tenor, or a lower interest rate.

By only having one debt payment post, it will also be easier for debtors to arrange payments and speed up debt repayment.

Are there any minus points for the use of debt consolidation?

Before deciding to take debt consolidation, it's a good idea to first ascertain how long the payment tenor can be extended. With a longer payment time, monthly installments are usually smaller, but the interest is greater. Make sure the payment calculation is done carefully beforehand.

How to start the consolidation of all debts?

There are several ways to start consolidating all your debts. Among these are:

1. Transfer credit card debt

Transfer or transfer debt of various credit cards to one card only, choose the lowest debt interest rate.

2. Re-mortgage a home or residence

Remortgage the house to get liquid funds, pay all debts, and repay the house through monthly payments.

3. Unsecured Loans / Credits

Many banks offer Unsecured Loans that can be taken to pay off all debts. There are even loan payment tenors of up to 5 years / 60 months.

4. Loan to the pawnshop office

Motor vehicles, gold jewelry, or other valuables can be mortgaged to the pawnshop office, to pay off other debts. A pawnshop office is an office that imposes fairly low-interest rates and more flexible payments than conventional credit agencies.

5. Loans from parents or family

Ask for help from parents or closest family to pay off debts. But, don't forget, pay back your loan on time so that the lending family is not disappointed and good relations are maintained.

That's a little information about "should I consolidate my debt". Hope it is useful.

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