How Debt Consolidation Can Help Save You Money

If you are struggling with a large amount of unsecured debt particularly in the form

of credit cards you may have found yourself caught in a trap high interest rates and high monthly payments. The higher the rate, the higher the payment, and if you are only paying the minimum, you are probably also stuck in the vicious cycle of only paying the interest on your card and not making a dent in the principal balance. One way to help break the cycle and pay down your debt through manageable monthly payments is under a debt consolidation plan.

How Does Debt Consolidation Work?

Debt consolidation works by combining all of your unsecured debts into one. For instance, if you carrying three different credit cards with three different balances, this also means you are making three different payments each month. Remembering to make payments to multiple creditors can be difficult, and managing the balances on each card can become overwhelming, particularly if each card has a different interest rate. By combining your debts into one, you only need to worry about one balance, one interest rate, and making payments to one creditor every month.

Debt reduction resources through non-profit credit counseling agencies can help you consolidate your debt and offer financial relief through lower monthly payments each month. Professional debt consolidation services will combine your debt into one and at an interest rate that will likely be significantly lower than the rates on your current credit cards. And instead of making payments to credit card agencies every month, you make one simple payment to the credit counseling agency who is managing your debt. Once you make your payment, the agency then disperses appropriate payments to your creditors on your behalf.

What's the Benefit of Debt Consolidation?

Because a non-profit credit counseling agency can offer you a lower interest rate on your newly consolidated date, your monthly payments will be lower, meaning more money in your pocket each month while still paying down your debt. The money you save each month can be put toward more immediate, more pressing needs for you and your family. It also gives you the opportunity to actually establish a comfortable nest egg for future expenses. To truly maximize your savings, you may wish to set up a budget management plan to be sure you are spending within your means each month. Maintaining a budget will allow you to save money and avoid getting yourself into any additional debt.

For more information on what debt reduction resources are available to you, contact a reputable non-profit credit counseling agency for more information today.

by: William Hauselberg

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