Debt Consolidation - Top 3 Benefits of Debt Consolidation

Debt Consolidation - Top 3 Benefits of Debt Consolidation

One of the first and most beneficial aspects of debt settlement is debt consolidation, which allows you to wrap all your debts and unpaid loans into a single, low-interest loan. Individuals struggle to pay back their debts for numerous reasons, and no two people have the same history and the same issues to work through. But debt settlement, specifically through a debt consolidation loan, can solve many of the problems that people face when they are underwater on their credit card debt. There are three distinct advantages to a debt consolidation loan.

First, you will be able to keep better track of where and when your payments are due, because you'll only have one creditor to work with and one bill to pay each month. This can resolve much of the hassle for some borrowers, who have difficulty making payments on their debt due to simple disorganization. You won't be hounded by calls from numerous creditors. Rather, you will deal with one organization, and if you communicate well with them and are able to keep track of your one bill, your debt situation will be much smoother.

Second, because the loan that you are repaying is a single new loan that has started fresh, you will often have a longer period of time in which to pay the loan off. Often, when an individual is stuck in credit card debt, there are certain payments that haven't been made that are coming due very quickly. This can lead to additional stress. But with a debt consolidation loan, your payback time is greatly extended, which relieves you from this deadline crunch.

Third, and most importantly, debt consolidation loans often come at a lower interest rate than the credit cards or other loans you are struggling to pay back. This interest rate, in fact, can be much, much lower. Even if you extend the life of your loan, the money you save from a lower interest rate will be astronomical. This is one of the most helpful things debt settlement can provide.

This is all in addition to the fact that debt settlement companies are able to negotiate with creditors to get some of your debt written off entirely. This could mean an immediate reduction of the amount of your debt, from about 20% of the balance up to 75% of the balance at times. This, of course, is extremely beneficial. Clearly, for all these reasons, debt settlement is an excellent way to deal with high credit card debt.

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