Consolidating bills into one monthly payment
Dave says, "Personal finance is 80% behavior and only 20% head knowledge." Even though your choices landed you in a pile of debt, you have the power to work your way out! The solution isn’t a quick fix, and it won’t come in the form of a better interest rate, another loan, or debt settlement. The solution requires you to roll up your sleeves, make a plan for your money, and take action!
Minimum monthly payments aren’t doing the trick to help nix your debt.Here are the top things you need to know before you consolidate your debt: But here’s the deal: debt consolidation promises one thing but delivers another.That’s why dishonest companies that promote too-good-to-be-true debt relief programs continue to rank as the top consumer complaint received by the Federal Trade Commission.Their behavior hasn’t changed, so it’s extremely likely they will go right back into debt. The debt includes a two-year loan for $10,000 at 12%, and a four-year loan for $20,000 at 10%.Your monthly payment on the first loan is $517, and the payment on the second is $583. You consult a company that promises to lower your payment to $640 per month and your interest rate to 9% by negotiating with your creditors and rolling the two loans together into one. Who wouldn’t want to pay $460 less per month in payments?Something has to change, and you’re considering debt consolidation because of the allure of one easy payment and the promise of lower interest rates.
The truth is debt consolidation loans and debt settlement companies don’t help you slay mammoth amounts of debt.
You don’t need to consolidate your bills—you need to delete them.
To do that, you have to change the way you view debt!
Here’s why you should skip debt consolidation and opt instead to follow a plan that helps you actually win with money: The debt consolidation loan interest rate is usually set at the discretion of the lender or creditor and depends on your past payment behavior and credit score.
Even if you qualify for a loan with low interest, there’s no guarantee the rate will stay low.
Most of the time, after someone consolidates their debt, the debt grows back. They don’t have a game plan to pay cash and spend less.