The key benefits of consolidation programs

barb-jonesIf you’re among the millions of Americans who are struggling with multiple debts, juggling various due dates, facing harassment from different collection agents, then debt consolidation may be the solution for you. Especially if you have turned, over the last few years, to credit cards to make even basic bill payments.


If you’re thinking of selling your home to repay debt, don’t. Struggling with monthly payments and need improved cash flow? Well, there are solutions, there’s absolutely no need to fret. Wishing that credit agencies would stop calling you? That’s possible.


Whether its credit card debt or other unsecured creditors that are owed, the debt consolidation program can help you get out of debt. Whereas most consumers suffer from high interest, others may want a lower payment. These are all benefits that these programs offer to consumers. It’s important to understand, that credit cards give consumers the false illusion of having money that simple does not exist. It’s a proven fact that an estimated 90% of new credit card holders run the card close to the credit limit, in the first 30 days of having the actual card.


houston-short-term-loansWhen considering debt consolidation the most sought after benefits would be the reduction of minimum payments, finance charges and of course the repayment length. In summary, when trying to pay on credit card debt consolidation is considered the only debt help program that is not calculated into the consumers credit score. In short, we’ll cover a few of the key benefits of consolidation and how these programs can help.


Reduce credit card and quick cash loans interest rates by opting for debt consolidation, you are attempting to consolidate debt with your creditors to lower the interest rates. It is advisable to approach a consolidation company as they are better placed to negotiate on your behalf as opposed to you doing it on your own. The creditors in turn are able to restructure your payment method, in order to make it easy for you to manage the program. Having these lower interest rates will indeed help.


When reducing the credit card interest rates, consumers will start to see a larger percentage of the newly restructured minimum payment, go toward the actual balance and not toward finance charges and interest rates. It’s important to understand that these compound interest rates is what holds consumers down, from actually becoming debt free.


Once you enroll in a debt consolidation program, you will receive a comparison on what the programs can do in order to help. These services are offered by the creditors and will reflect new the new minimum payments and interest rates that will go into effect. When making the new minimum payments in the debt consolidation program, you’ll see a greater percentage of the minimum go toward the balance as opposed to finance charges and fees. When entering a debt consolidation program, the drafts will be done by ACH. This is set up as a means of ensuring that during this process, you don’t default in payments and as such, increases your ability to organize your financial situation better.


If looking to save money on a month to month basis, consolidation will be able to help. Although your minimum payments, for sake of argument, may be five hundred a month – consumers should be paying two or even three times this amount. Given a consumer does not double or triple pay the minimums, getting out of debt will seem virtually impossible.


The benefit of having one monthly payment is another key benefit to the debt consolidation programs, is the consolidation of having one monthly payment. Now given you have one or two bills, this may seem non beneficial to you. However, for consumers whom have five, ten, fifteen or more credit card bills, having one payment will remove a great deal of stress from your life. This benefit removes the stress of having to deal with two or more monthly payments every month.


cash-reliefReducing late fees, finance charges along with other fees is a very common benefits to the debt consolidation programs is the reduction or even elimination of late fees and charges. Although this is not guaranteed, it’s a very common benefit when enrolling credit card debts into these types of programs. Credit card companies tend to charge recurring annual fees, recurring monthly fees, in addition to several fees which are utterly useless to the consumer. By considering a consolidation program, these fees will minimize dramatically, or stop indefinitely.


With the benefit of a lower payment, a reduction in payoff length by choosing a debt consolidation program, you can clear your debts in a span of 2 to 6 years rather than 20 years. Consumers would think that by having a lower payment amount would increase the payment duration, wrong. Since the annual, monthly and interest rates are reduced or even eliminated in some cases, repayment length is cut down to a fraction.


Ensure that your credit is improved since payments are setup for automatic draft, payments will be disbursed on time by the non profit and your credit will remain in good standing. According to FICO, the credit counseling program is not calculated into the consumers credit score. So with this said, the benefits to these programs will not harm your credit. Also, seeing that the balances will actually be going down can’t hurt either. If looking for a debt help program and wanting to keep your credit in good standing, consolidation would be the only solution that would be able to help.


The benefits associated with debt consolidation programs are many. If your balances are not moving and feel as if your getting no where its for this reason that it is advisable to consider enrollment. To top it off, it also ensures that you don’t have to deal directly with creditors and ensures that you get the professional debt help your ultimately looking for.