Consolidating debt a good idea
The debt includes a two-year loan for ,000 at 12% and a four-year loan for ,000 at 10%.
Your monthly payment on the first loan is 7, and the payment on the second is 3. If you make monthly payments on them, you will be out of debt in 41 months and have paid a total of ,821.
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. But the truth is debt consolidation loans and debt settlement companies suck even more. In fact, you end up paying more and staying in debt longer because of so-called consolidation.
Get the facts before you consolidate your debt or work with a settlement company.
In almost every case, you’ll have lower payments because the term of your loan is prolonged. You are only restructuring your debt, not eliminating it.
You don’t need debt rearrangement—you need debt reformation.
Debt settlement is a scam, and any debt relief company that charges you before they actually settle or reduce your debt is in violation of the Federal Trade Commission. When you consolidate your debts or work with a debt settlement company, you’ll only treat the symptoms of your money problems and never get to the core of why you have issues in the first place.
And other loan companies will hook you with a low interest rate then inflate the interest rate over time, leaving you with more debt! Your goal should be to get out of debt as fast as you can!
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.
Let’s say you have ,000 in unsecured debt—think credit cards, car loans and medical bills.