Read Us 24x7
Write For Us
No Result
View All Result
  • Home
  • Technology
  • Entertainment
  • Reviews
  • Others
    • Digital Marketing
    • Insurance
    • Social Media
    • Business
    • COVID 19
    • Lifestyle
    • Sports
    • World Wide
  • Submit Press Release
  • Tech Q&A
  • Write For Us
  • Home
  • Technology
  • Entertainment
  • Reviews
  • Others
    • Digital Marketing
    • Insurance
    • Social Media
    • Business
    • COVID 19
    • Lifestyle
    • Sports
    • World Wide
  • Submit Press Release
  • Tech Q&A
  • Write For Us
No Result
View All Result
Read Us 24x7
No Result
View All Result

Smart Debt Consolidation Tips

Erick Miser by Erick Miser
May 13, 2022
in Business
Debt Consolidation
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on PinterestShare on Whatsapp

Smart debt consolidation strategies are necessary for anyone struggling with multiple, high-interest debts or bills. Indeed, if your debts are piling out of control, consider combining them to ease your monthly financial obligations. Debt consolidation conveniently lumps all your debt obligations, lowers the overall interest payable, and simplifies your monthly payments. With the right approach, you swap high-interest debts for lower interest ones, distributed over an extended period.

Here are five smart debt consolidation tips you can use.

Table of Contents

  • 1. Know the Difference between Debt Settlement and Debt Consolidation
    •  How Debt Consolidation Works
  • 2. Address the Underlying Cause
  • 3. Pick Debts for Consolidation Wisely
  • 4. Keep off Credit Cards
  • 5. Create an Emergency Fund
  • Final Thoughts

1. Know the Difference between Debt Settlement and Debt Consolidation

Like any other financial strategy, debt consolidation is not for everyone. Then, determine whether you need debt consolidation or a debt settlement plan. Debt settlement happens when your creditor accepts a lower repayment as a full settlement of your current debt. It appears in credit reports as “Paid Settled”, or “Settled”, and will affect your credit score in the long term. And, if you have a poor credit score, then debt consolidation is a more viable option.

 How Debt Consolidation Works

Debt consolidation entails merging multiple loans into a single financial commitment. It shifts all your existing loans into a single, manageable debt. Hence, you take a new loan to pay off all previous debt obligations. Then you are left with only one loan, hence making a convenient single monthly payment.

Besides, borrowers with a good credit score can negotiate better terms for the new consolidated loan. Still, as per what Bills.com says about how to get a debt consolidation loan with bad credit, all hope is not lost if you have bad credit. By comparing multiple loan offers, you can save on interest rates and improve your credit rating.

Opt for debt consolidation if the new loan has an interest rate that is much lower than the cumulative interest from your existing debts. Also, try to avoid lenders that charge origination fees, as these additional charges may pile up in the long run.

2. Address the Underlying Cause

Next, analyze your spending to pinpoint where your money is going. For example, operating without a household budget makes you vulnerable to overspending or impulse buying using high-interest loans. And, a late repayment of loans attracts hefty penalties and fines. Then, come up with a balanced budget and take up one or two loans that will consolidate all your financial obligations into manageable monthly payments.

3. Pick Debts for Consolidation Wisely

Note that not all debts qualify for consolidation. Most unsecured loans like gas cards, pending medical bills, credit cards, and store cards are suitable for consolidation. However, you may have to deal with overdue utility bills for utilities that are yet to be terminated by the service provider separately from other debts.

Second, even though the debt consolidation strategy will result in fewer monthly repayments, this convenience may be at the expense of higher interest and fees distributed over a longer duration. Then, analyze the debt consolidation solution before agreeing to it. Then, only consolidate high-interest debts, and set up auto payments for the lower interest debts.

4. Keep off Credit Cards

After consolidating your debts, the financial relief can easily tempt you into acquiring more debt. Therefore, resolve not to charge any additional expenses to your credit cards until you settle your consolidated debts. Otherwise, a lack of financial discipline may sink deeper into debt, leading to bankruptcy or loss of property t debt collectors.

5. Create an Emergency Fund

Set aside an emergency fund. An emergency fund will be your fallback plan whenever you need to make unplanned spending and other emergency expenses. The fund will help you avoid high-interest credit card debts. Deposit the fund in a savings account. the fund should buffer you for at least three months. Then, top up the fund to cushion you for six months, then one year.

Final Thoughts

Smart debt consolidation tips are your gateway to financial freedom, especially when struggling with multiple high-interest debts. Investigate the cause of your current debt situation. Then, decide on which present debts to consolidate. Next, create an emergency fund that will shield you from the temptation of adding more debt while serving your consolidated loan. A typical consolidation loan may take 24 to 60 months; hence, financial discipline is necessary.

ShareTweetPinSend
Erick Miser

Erick Miser

Erick Miser is a Senior Editor at Read Us 24x7. He lives in the United States of America. He’s best known for Technical, business, and review Content Writing along with the proper knowledge base of SEO.

Related Posts

Ethical Investing
Business

New to Ethical Investing? Learn How to Get Started Here

May 20, 2022
25 Dollars An Hour
Business

25 Dollars An Hour Is How Much A Year (After Tax 2022)

May 19, 2022
Auto Shipping
Business

Top Auto Shipping Trends of 2022

May 17, 2022
Business Workflow Mapping
Business

The Framework of Business Workflow Mapping

May 16, 2022
BBVA Near Me
Business

BBVA Near Me: Find Nearby Bank Branches & ATM Locations

May 12, 2022
Wells Fargo Near Me
Business

Wells Fargo Near Me: Find Branches, ATMs, Customer Service Nearby

May 10, 2022
Next Post
write a paper

Why Do I Need A Writer To Do My Paper For Me?

Recommended

Ethical Investing

New to Ethical Investing? Learn How to Get Started Here

May 20, 2022
Ugly Cartoon Characters

Top 20 Ugly Cartoon Characters in 2022

May 20, 2022
Event Marketing Plan

Essential Tips for Creating an Effective Event Marketing Plan

May 20, 2022
Google Cloud

Migration to Google Cloud: Getting Started

May 20, 2022
Filmmakers In Canada

Which Is The Best City For Filmmakers In Canada?

May 19, 2022
How to Play Outburst on Zoom

How to Play Outburst on Zoom (Game Rules 2022)

May 19, 2022

About Us

Read Us 24×7 comes with the Latest News around the Globe. From Business to Entertainment, from Sports to Technologies you will find everything right over here.

Mail ID – [email protected]

google-play-badge

New to Ethical Investing? Learn How to Get Started Here

Top 20 Ugly Cartoon Characters in 2022

Essential Tips for Creating an Effective Event Marketing Plan

Migration to Google Cloud: Getting Started

Which Is The Best City For Filmmakers In Canada?

How to Play Outburst on Zoom (Game Rules 2022)

google news

Protected by Copyscape DMCA.com Protection Status

  • Terms of Service
  • Privacy Policy
  • Contact Us
  • About Us
  • Sitemap
  • Write For Us
  • Submit Press Release

Copyright © 2021 Read Us 24x7

No Result
View All Result
  • Home
  • Technology
  • Entertainment
  • Reviews
  • Others
    • Digital Marketing
    • Insurance
    • Social Media
    • Business
    • COVID 19
    • Lifestyle
    • Sports
    • World Wide
  • Submit Press Release
  • Tech Q&A
  • Write For Us

Copyright © 2021 Read Us 24x7

close button