Monday, May 4, 2009

Why You Need To Consolidate Your Loans

By: David Horvath

No body likes to live in debt, if given an option. But it is a sad reality that the people of America are going under a sea of debts. Every one is neck deep into debts and the multiple credit card dues haunt every household. The average American would today do anything in his capacity to get rid of his debts and live a debt free life from now on. There is an option open before him and that is the wonderful debt consolidation loan. On the face of it such an offer would look only ridiculous as paying 5 loans of $200 each by borrowing a fresh loan of $1000. Does it make a difference at all? A sea of difference, if only proper care is shown in selecting the debt consolidation scheme.

You will be surprised to know that what hurts you in the pockets is not the amount that you borrowed but the huge interest charged to it. You may be having a multiple credit card debt and each one may show a debit balance of $2000. Remember the credit card company would charge interest and penalty for late payment to the tune of $60 per month. This works out to a 36% rate of interest per annum. No loan for anything else in this country is available at such exorbitant rates. By consolidating all your debts and getting a fresh loan at around 13% per annum you not only save 23% but your monthly payment that you would be paying for this debt consolidation loan is lower by 60% .imagine how much relieved you would be when you pay a lots lesser by way of a debt consolidation loan.

But, in your haste to mend things fast do not choose a wrong debt consolidation service company. Make thorough enquiries and scan the web for honest companies that provide this service. Do not choose a company that provides consolidation service free for you because the hidden costs may be more. When you are signing up do read the fine print and ensure that the lender is not after gobbling your collateral security. Go in for a secured loan if possible as it carries a very low interest and would serve your purpose of recovering the cost of your earlier loans. Soon your finances would become robust and the money you pay every month would be much less. In fact some of it is now offsetting the principal amount also and before long you would be cleared of all your loans. In order to prevent the same mistake again you should take a credit card and loan management counseling.

A little bit of financial sanity would ensure that you do not fall in to such pit falls again. Bring about a change in your spending pattern and think of buying only things that you can not live without. A credit card loan can put a hole through your pocket. Only a debt consolidation loan can mend that hole.


Anonymous Anonymous said...

thanks for useful info.

eloan mortgage

June 23, 2009 at 2:37 PM  

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