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Benefits of Consolidating Your Present Debts

Jan 22, 2008
If you are totally in over your head in debt you may want to consider immediately consolidating your debt now before you accumulate any more interest charges. Many people believe that debt consolidation is only for people who are going through bankruptcy, but this simply isn't true.

Debt consolidation is for anyone that is tired of being in debt and wants a better way to deal his or her debt. If you are tired of paying interest to several different sources and you would like to have just one debt rather than a bunch of smaller ones debt consolidation is the way to go.

Why You Should Consolidate Your Debt

You should consolidate your debt because it will allow you to stop paying so much interest. Sure, when you consolidate you are actually creating an account that has a bigger balance but what you are doing is paying just one interest rate. Say you had three accounts that were $1,000 each and you were paying 28% interest on each of them that is a lot of money and if you only pay the minimum amount due you will never be able to pay off the debts entirely.

Now, if you consolidated your debt and you were paying 11% on the full $3,000 you would be paying a lot less, and even if you continued to make the same payment you would be making a bigger dent in what you owe so that you could actually be debt free in the future.

Another reason that you should consolidate your debt is because you can get creditors off of your back. When you consolidate the debt you are essentially paying off the old debts and turning them into one debt that you owe a new lender. This will allow you to be rid of the nagging phone calls that you get every night from the companies that want your money. As long as you stay current with your consolidated plan you shouldn't have an issue with creditors calling and hounding you.

In addition to doing away with high interest fees and nagging debt collectors you can also help your credit by consolidating your debt. If you have a lot of delinquent accounts that you are not paying on you can help your credit from being damaged any further by consolidating those debts, which will show them as paid on your credit report. While it will not perfect your credit it will at least help you from getting any more red marks on it.

Debt consolidation simply helps for everyday people to get out of financial trouble, perhaps before things even get bad. If you have debts that you are not able to pay on because you simply have too many debts and interest rates to juggle, why not consolidate them? You'll likely pay less in interest and you'll be able to keep track of your debts and even pay them off sooner than you would have been able to pay them off otherwise.
About the Author
The good deal about debt consolidation loans is that they make good financial sense by putting all your loans into one easy to manage account. We help you get this form of borrowing at comparethem.co.uk.
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