Debt consolidation program helps you pay off your unsecured bills through an easy and single monthly payment plan. This program helps you make only one payment instead of 7 or 8 in every month.
Here’s a detailed analogy of how the process of Debt Consolidation Happens
Are you worried about paying your credit card bills owing to the high-interest rates? Why won’t you be?
After all, you need to pay all the EMI’s of your dream car, house and the latest gadgets that you always wanted to buy irrespective of the debt consequences. However, you are not alone in this world who has got these problems. There are many others as well and for them, Debt Consolidation is the best way to manage your debt.
Debt Consolidation will help you reduce your interest rate, the value of your monthly EMI’s and can eventually eliminate it altogether.
Here are the best ways to reduce your debt –
Search for Reduced Interest Rates
If you get a lower interest rate, then the major portion of your payments will go towards paying off the principal amount of your loan. It will help you pay off your debt faster. Here’s how you can get a lower interest rate –
- You can request a lower interest rate from your credit card provider
- Opt for a credit card with lower interest and transfer your pending balance to it
- If transfer is not possible, then reduce the balance towards a card with a lower interest rate. This will minimize the credit card charges
Consolidate Debt With Loans or Line of Credit
Debt Consolidation can not only help you manage your monthly payments with ease but also help you in reducing the interest to a much lower value than your previous interest rate. The best ways include –
- Apply for a debt consolidation loan and then pay the monthly payment for the first time at a reduced rate
- Instead of taking another loan to pay off the first, open a line of credit and repay with each usage
Opt for a Better Method of Paying Off Your Debts
Once your debts have been consolidated into loans and few payments, put the debts that your can repay first as a priority and then the later ones as secondary ones. Here is the easy solution for the above process.
Pay the loans with the higher interest rates first
It is advised to deal with the loans with the highest interest rates first because the interest starts piling up more on it. Hence, if the loan with the higher interest rates are easy for you to pay, we suggest you to pay that first as it will reduce your financial burden. However, think twice if the loan with the highest interest rate is the highest valued loan that you have. In that case, it will take longer to pay off the debt and will increase your financial burden.
Pay smaller loans first
If you pay off your smaller loans first, then it might reduce your overall debts and you can move towards the bigger ones with a better and much-relaxed mindset.
How can these programs help you start a new financial life?
- Help you make lower payment every month
- Help to reduce the number of calls you get from creditors
- Leave you with only one monthly payment plan
- Help you repay your bills within 2-5 years
- Help you improve credit gradually
- May help you knock out the fines and/or late fees
You can check out the benefits of these programs to know how they help you get a fresh financial start.
What kind of bills can be paid off through the program?
- Credit card bills
- Store cards
- Personal loans
- Medical bills
- Collection accounts
- Other unsecured bills
Student loans Can be paid through secured/unsecured debt consolidation loans
What factors do you need to consider before the consolidation of debt?
How much you want to consolidate?: A company may require a minimum amount of debt for you to enroll in the program.
How much you’ve to pay on fees?: Check out the fees and calculate whether or not you’re able to pay the amount every month.
How much you need to pay for an interest rate?: The main benefit of consolidation is to lower interest and reduce monthly payments. However, repayment term should not be more like opting for it may result in more spending in the long run.
How do debt consolidation programs work?
Check out these 5 steps to know how do debt consolidation programs work:
- No-obligation free financial analysis – Debt counselors make a thorough review of your income and expenses, along with your debts, to decide upon an affordable amount you can pay every month.
- Sign a written agreement – You can ask questions (such as fees, monthly payment amount, etc.) during the counseling session. If you’re happy and satisfied with the session, you can sign up for debt consolidation services.
- Get relief from the creditor calls – Once you’ve cleared your doubts and signed required documents, the counselor starts negotiating with your creditors to lower interest rates and eliminate late fees. They also put forward the payment plan.
- Make one payment to the company – After the counselors finalize a payment plan, which is accepted by all the parties, you start making the single monthly payment to the company. The consolidation company then disburses the amount amongst your creditors.
- Re-assessment of your financial situation – Usually, after 180 days, the counselor asks you about your financial situation. If it has become worse, notify the counselor so that he/she can re-negotiate a new payment plan with your creditors as per your current situation.
How can you get the best debt consolidation program?
- Ask for a free consultation with First Option Recovery
- Find out customers’ views regarding the company
- Get detailed information about the program
- Need to know your financial obligations
- Prioritize your creditors
The right way to choose the best debt consolidation program is to make a comparative analysis of your financial obligations and prioritizing your creditors
What are the reasons behind the popularity of online debt consolidation?
- You can get a fresh financial start
- Your payment process can get accelerated
- You can get debt consolidation help 24*7
- Easier for you to make your monthly payments quickly
- You can compare various online companies from your home
- You can get free counseling online and save time
- You may get fast debt consolidation service
Apart from Debt Consolidation, First Option Recovery also offers services likes Debt Management and Debt Settlement.
