How You Benefit from Debt Consolidation
How you benefit from debt consolidation is important before starting the consolidation process. You already get a sense that consolidating your debt is going to be a sigh of relief. But how else does it benefit you? And are there any drawbacks to completing a debt consolidation?
Single payment
Forget trying to manage multiple payments each month. Get your debt down to one payment once a month. Once you come to an agreement your rate is fixed and your payment is as well. One payment will be drafted on a date of your choosing. Once payment is received each creditor receives a portion of the payment until each balance is paid in full.
Fixed Rate
When your interest rate doesn’t change, you know exactly how much your payment is going to be each month. Furthermore, your payment will go towards principal. And that makes planning and budgeting so much easier. Most credit cards average above 16% APR (annual percentage rate). However, when you you are completing a debt consolidation your new rate could be as low as 3%.
End Date
Ever feel like you have no idea when your credit cards will be paid off? A Debt Consolidation has a defined term so you actually know when it will be paid off – right down to the day. Have a small gathering or go out for an affordable dinner to celebrate.
Savings
If you’re lowering your interest rate, then you’re putting less money towards interest payments. Suddenly building your emergency savings, improving your credit score, buying a home and building wealth becomes a reality. Allow Budget Build Buy to assist you live your best life.
For some, debt consolidation might not be the best fit. Debt consolidation will save you money but it does not save you the greatest amount of money. If you want to maximize your savings, buy a home and build wealth please contact one of our specialist.
