Consolidating debt good

05 Mar

If you’re in that kind of situation, there’s a good chance your debt will grow faster than you can pay it off.Which is why a consolidation loan can often prove to be a better option: it may allow you to get a lower interest rate, which would save you money over the long-run.If you need help getting out of debt, you are not alone.Although signs show an upturn in the economy, many Americans are deep in debt, and not everyone can work overtime or a second job to pay down that debt.

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That can lead to a domino effect where you miss payments, your interest rates get raised, and then you can’t stay above water.

If you are considering debt-consolidation options, avoid these misrepresentations: Credit counseling involves helping consumers develop a budget and the discipline to make steady payments to clear their debt loads. "Most of these individuals make a decent living, but at the end of the week don't have enough money and don't understand why," says Joel Greenberg, president of New Jersey-based Novadebt.

Debt-management programs -- or DMPs as insiders like to shorten it -- are one tool in the credit counselors' kit.

Consolidating multiple credit accounts into one new loan with a single payment may help you lower your overall monthly expenses, increase your cash flow, and eliminate the stress of multiple monthly payments.

When you're choosing the term of a loan, consider the total amount of interest and fees you’ll pay.