Bill Consolidation

We are debt consolidators. Debt and bill consolidation is an attractive option for dealing with multiple loan and credit card bills that exceed your ability to pay.  The goal is to take all your monthly payments and combine them into one payment.  Debt consolidators can accomplish this by initiating a new loan that is used to pay off the existing debts and bills that typically carry higher interest rates and unfavorable terms.  While this approach does not reduce the principal portion of your debts and bills, it does make it easier for you to pay the debts and bills back with a new payment schedule and lower monthly payments.

Simplify your bills

If you are paying off more than one bill, loan or credit card, you are most likely paying a higher monthly payment than if you consolidated them into one payment.  Through debt consolidation, you will get one bill every month to deal with instead of several bills.  Unlike a credit card which offers the option of paying a minimum payment and may subject you to variable interest rates, a debt or bill consolidation loan will have a fixed payment with a fixed interest rate.  This simplifies your budgeting because you will always know precisely how much is due every month.

In addition, consolidating your credit saves time and money since you only deal with one bill every month.  If you set up an automatic payment from your checking account, you can avoid postage charges and late penalties should you forget to make a payment.  The result will be an organized, methodical plan to pay down your bills without the hassle of dealing with a number of anxious creditors.

Lower Your Monthly Payment

Most credit cards carry high interest rates, and entice you to spend more by offering low minimum payments every month. These minimum payments are set low by the credit card companies in order to extend the payback period for many years and to maximize the total finance charges you will pay. This can result in a total payment that is many times larger than the original cost of your purchase. If you take several years to pay off a credit card, then the amount of interest you end up paying will far exceed the principal that you originally owed.

If you have credit cards that carry balances, and each month you make the minimum payments, then debt consolidators can help in consolidating your bills.  This will eliminate the exorbitant credit card interest rates by paying off those cards with a single loan with a lower rate.  In addition, the term of the payoff loan can be structured so that the single monthly payment fits within your budget.

Avoid Bankruptcy

Bankruptcy should only be used when other options have failed to resolve your financial difficulties.  A bankruptcy judgment will be entered on your credit report and will remain there for at least 7 years.  Your financial affairs will be dictated by a judge and your ability to secure any new credit will disappear.  Since most people never expect to face bankruptcy, many experience severe embarrassment when their friends and family find out what has happened.

Better options such as debt or bill consolidation will either maintain your credit rating or minimize the damage to your rating.  Many creditors will try and work with you or a debt consolidator you hire if they are contacted by you or a debt consolidator and demonstrate that you are seeking a responsible solution to your debt problem.  If you declare bankruptcy, they will probably get nothing, so you can use that leverage to negotiate a debt or bill consolidation loan that is mutually beneficial.  As an option of last resort, bankruptcy should only be considered when you have exhausted all other opportunities to solve your personal crisis.

Become Debt Free

Initially you should focus on getting your debts and bills under control by curtailing spending on anything that isn’t absolutely necessary.  Next, perform a detailed review of all your expenses and list them individually on a spreadsheet.  For your loan and credit card payments, separate the principal from the interest so you can see exactly how much interest you are paying every month.  Your immediate goal should be to cut the interest expense as much as possible since this is something you can do on your own or you can hire a debt consolidator. 

During tough economic times, eliminating debt is not easy.  It requires discipline, a budget, and changes to your lifestyle and spending habits.  Many people don’t learn these lessons until they are already underwater with their credit cards.  If you find yourself in this position, you might consider using the services of a debt consolidator or debt management specialist.  These individuals can assist you in preparing a budget, savings plan, loan consolidation, and investment plan for the future.