What does the debt consolidation mean?
In basic terms, debt consolidation is the process of obtaining a loan to repay other loans with higher interest rates (ie credit cards). In general, these types of loan interest rates are lower than the full interest rate of the loan you want to consolidate.
How do I know to choose debt consolidation?
It all depends on your financial situation, how much debt you owe, your cost of living and your income. If you spend more than 40% of your income to clear your debt, you should choose debt consolidation as a possible alternative. Be sure to check your monthly budget and note how much income you used to pay for your debt.
What is the key to consolidating my debt?
It helps you to repay all your debts as soon as possible and eliminates the confusion of paying multiple types of bills each month. Once you merge, all your bills will be combined into one payment and you will be able to save even more money.
What bills and payments can I combine?
When consolidating debt, bills and payments with the highest interest rates are combined and then arranged in order.
What type of debt can I consolidate?
Here is a rule of thumb: If your debt is too large to manage or your interest rate is high, you can only merge. Any small bills close to the settlement or small bills that you are entitled to handle should not be included.
What else can I do?
Read your budget carefully and plan accordingly. If you can't save your salary from the creditor, the credit advisor can help you reduce your debt. If you keep all these questions and answers in mind, you will be able to avoid debt for a long time.
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Orignal From: Learn the basics of debt consolidation
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