5 Reasons Why Debt Consolidation Is Best For Paying Off Your Debts

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Being in extreme debt can be a distressing situation and lead to stress and dwindling bank balances over a period of time. The high interest’s rates charged on loans can add to your debt woes and the numerous processes involved can be highly cumbersome. A simple answer to your debt worries is debt consolidation.

Debt Consolidation loan is an easy solution where you combine your separate debts into one loan with a lower interest rate. Now instead of making multiple debt payments, you can simply make one debt payment.

Here are Five Reasons Why Debt Consolidation is the best solution for debts –

1. Lowered Interest Rate

Instead of paying separate interests over separate loans, debt consolidation provides you with avenue to reduce your interest rates while combining separate debts. They can also negotiate on your behalf with the concerned with the collection agencies.

2. Easy Debt Repayment Plan

The plan for debt repayment is made in such a way that debtor won’t default on their payments and find it much easy to repay the loans due to lowered interest rates. Debt Consolidation also eliminates the numerous trips you make for different payments by combining all of them into a single payment.

3. Elimination of Late Fees

The debt consolidation program offers ways through negotiation by which one can reduce or completely eliminate fines in case of late payments.

4. Stop Getting Harassed by Creditors

Constant reminders and calls from the credit companies or banks can be very irritating and disturbing. Usually when you sign a power of attorney with the consolidation company, your collector or credit agencies stop calling you.

5. Improve Credit in the Long Run

Now that debt consolidation offers you the advantages of lowered interest rates, no late payment fines, no defaults and charged off accounts. This would surely have a positive impact on your credit score. Being a part of the debt consolidation program also provides ways in which companies can negotiate with the creditors in your favour.

Along with these benefits the debt consolidation programs have offers for full counselling programs that one can avail before taking a decision to go forward with the debt consolidation program. Before you take the step towards debt consolidation program it’s crucial that you first do a thorough background check of the company. Choosing a wrong company can turn into a big nightmare leading to financial instability.

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About the Author

Ankur Shah
Ankur Shah is the founder of the Value Investing India Report, a leading independent, value oriented journal of the Indian financial markets. Ankur has more than eight years of equity research experience covering emerging markets, with a focus on India and South East Asia. He has worked as both a buy-side investment analyst for a global long/short equity hedge fund and a sell-side analyst for an emerging markets investment bank. Ankur is a graduate of Harvard Business School. You can learn more about his latest views on global markets at the Value Investing India Report. -- He can be emailed at AnkurShah47@gmail.com

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