Having to deal with a lot of debt can be incredibly stressful, whether it’s a family or a single person dealing with it. Having more than one creditor to repay can make that stress worse.
In these days of heavy credit card usage, people are finding it more and more difficult to keep on top of things, like mortgage repayments, paying the balance on their credit cards each month – even buying groceries.
Every day the price of fuel rises, the price of groceries increase due to natural disasters wiping out crops, and people are really finding it difficult. The minimum wage does not increase, pay rises are harder to come by and unemployment is an extraordinary problem, making everyday life a stressful event.
One thing you can do is approach a financial counselor to consolidate your debt. So how would that work? Debt consolidation is a major topic on television and there are many companies advertising their services. How it works is that all of your debts including credit cards, mortgages, personal loans would be combined into one loan. You would then only have one debt to pay, rather than several debts all due on different dates and difficult to keep track of.
This sounds great, doesn’t it? A great stress reduction technique. You should be aware however that there are many debt reduction companies advertising their services, so a good investigation should be undertaken when you are deciding on a company to help you. Research the companies, look for good reviews, ask around if you have friends in the same position.
Once you approach a company, you will undertake credit counselling and options will be put forward for you to choose. Typically, debt consolidation is the method most generally accepted. The company will speak on your behalf with your creditors to get you the best deal on interest rates and late fees, but you will find that you have the ability to make the monthly, fortnightly or weekly payment agreed upon.
The time frame for getting out of debt in this way can be greatly less than having several debts to several different creditors. You should be prepared that you will not be able to open any new accounts until the debt is repaid, and you will have to close existing credit accounts, which may have an effect on your credit score.
Beware! There are many companies that will make outrageous claims, and many scammers, so do your research carefully!