Consolidation Of Our Debts

By Author: Austin patrik
Total Articles: 11
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The financial management becomes a tedious job for everyone when they have more than one loan or multiple credit card outstanding balances. These loans turn into stressful liability when debtor is not able to manage them properly.

Over limit fees, late payment fee and extra financial charges stress on already stressed out finances, the best way to manage all debts and avoid extra financial charges is to consolidate all debts into a debt consolidation loan. The debt consolidation loan gives freedom to make a single payment at lower rate of interest, this program focuses on minimizing number of loans, rate of interest and term of repayment. There are many consolidation loans program available in the market, but you have to spend time and make effort to analyze and extract out the best suitable loan. Here are three simple suggestions, which not only you but everyone can use as references while opting for best loan to consolidate multiple debts.

Suggestion #1: Applying 3S Rule:- Search, scrutinize and shortlist consolidation loans

Like all advertisement, consolidation loans offers also appears good at once. ...
... You have to carefully scrutinize the details of the offer to determine the best loan available. Usually offers low rate of interest carries high charges in form of fees. Most often, loans with very attractive interest rates have a limited term for which they are offered, after term the interest rate will be reset to higher rate, extracting out more in longer run. You have to ask for the details and calculate all fees involved. There are certain hidden fees that are not mentioned in offers, but are printed in the loan agreement.

Suggestion #2: Debt consolidation loan with very low monthly payment are harmful

As you know all promotions comes with a limited term. Everyone like you, others and me are attracted to low monthly promotions, but they actually cost more at the end. The highly competitive loan market forces creditors to offer consolidation loan packages that allow paying super low monthly payment, these offers are always with small printed asterisk terms and conditions that may be not noticed. The low monthly payments carry low interest rate for initial promotion period, which bounce back to standard rate of interest as soon as promotion period is over which is 3 to 6 months. Extending the loan repayment period lowers the monthly payment; this allows lenders to charge more interest in long run. This offer saves your interest for very short duration, but you actually pay more in longer run. Therefore, always try to avoid super low monthly payment to travel on debt free road.

Suggestion #3: Variable rate of interest should be avoided

The lenders offers variable interest rates to attract new customers, they make you believe that low interest rate will stick around for a long duration of time. The lender offers brings your attention to super low monthly interest rate and you think that it will benefit if you sign up with them. But, in reality there is a different story, you might be surprised by sudden hike in interest rate. The variable interest rate reduces the risk of lender if interest rate is hiked in future; they are always on a safer side. That is why it is always better to get a loan with constant interest rate than having a worry to be charged more in future.

Debt Settlement & Debt consolidation