With debt consolidation, the debt is transferred from your high interest credit card accounts to a lower interest loan. Often, the lower interest loan has a fixed term, which gives you a defined period of time when your debts will be paid off.
(prHWY.com) February 22, 2012 - Philadelphia, IL -- For people who carry the burden of high balances on their credit cards, filing for bankruptcy is one solution to consider. However, this is a solution that can have long term, negative effects on your credit rating. So it is advisable to avoid bankruptcy and pursue other options for eliminating debt from you life if possible. Debt consolidation is one option that should be explored before filing for bankruptcy, and if you have taken steps to consolidate your debt today, you have taken the first step toward better debt management in your life.
With debt consolidation, the debt is transferred from your high interest credit card accounts to a lower interest loan. Often, the lower interest loan has a fixed term, which gives you a defined period of time when your debts will be paid off. Debt consolidation in itself does not eliminate debt from your life, but because it lowers your interest rate and rolls the debt into a fixed term, it is easier to pay the debt off in most cases. Because the debt is still present, however, you do have take measures to ensure that you pay your bills on time and avoid making additional charges to your credit cards if you want to avoid bankruptcy.
If debt consolidation loans do not prevent bankruptcy, you may be asking, "Why did I
consolidate my debt?" In addition to making the debt easier to pay off through lower interest and a fixed term, often the loan has a reduced monthly payment, too. This can ease your tight budget. However, if you want to avoid bankruptcy, there are other steps you should take in addition to
consolidating debt. You should first consider adjusting your budget and cutting back on spending in various ways to prevent the need to use credit cards in the future. You can consider cutting back on frivolous spending like avoiding pricey meals at restaurants and choosing to watch movies at home rather than visiting the movie theater. You can also trim your regular expenses by shopping for lower auto insurance rates, homeowners insurance rates, and more.
Many people find that they can trim their budget significantly with some effort. The extra cash freed up through this process can give you the breathing room you need to avoid accumulating credit card debt. However, you should also take the extra step of putting some of that extra money each month into a savings account. You can set up an auto-withdrawal that transfers money into a savings account to make savings automatic. With this savings, you have a source of cash that you can use for emergencies, further preventing you from using credit cards.
CONTACT INFORMATION
LEANNA HARWOOD
Consolidate my Debt Today
888-321-3809
http://www.consolidatemydebtoday.com
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