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What consumers must know about debt consolidation opportunities

26th December 2020 Print

Consumers with high-volume debts need a clear solution that helps them gain control over their finances. With high-volume debt, one false move leads to financial ruin and prevents the person from making any major purchases. They may lose their home, their automobile, or other dire circumstances that lead to serious financial losses. A debt consolidation loan presents a better solution if the person applies before, they are facing more dire situations. The loans allow them to pay off several debts according to their preferences.

Managing More Debts at Once

Debt consolidation allows debtors to manage several debts at once instead of creating a plan to manage one debt at a time. The consumer decides what debts they include in their debt consolidation loan or plan. They review their current credit history to determine if they want to add all their debts together, or if they should focus on a collection of smaller debts first. Consumers can learn more about their loan options by visiting National Debt Relief right now.

Avoiding All the Extra Interest Payments

With high volume debts, people generate higher-than-average amounts of interest for each account. With a debt consolidation loan, the borrower gets funds to pay off several debts at once and eliminate all the extra interest for the debts. It is highly beneficial to use the product if the person has excessive debts such as unsecured credit card debts with interest rates around 22% or higher.

Paying Off Credit Card Debts Faster

Credit card debts present the greatest obstacles for consumers, and the debts are harder to pay off if they just submit the minimum monthly payments. The minimum monthly payments don't cover all the interest applied to the credit card account, and the account holders may spend years paying off the debts if they don't take out a debt consolidation loan.

Improving Credit Scores at a Faster Rate

Consumers see major improvements in their credit scores after they pay off their original creditors. Too often the original listing on the credit reports shows late payments and has a negative impact on the person's credit scores. By paying off the original creditor, the account holder can request removal for each listing and get rid of all these negative listings at once. Since they are paying the accounts in full, they receive all the credit points for the accounts. The credit scores increase according to the total amount of debts removed from the credit history.

Paying One Monthly Payment

By condensing the debts down to one monthly payment, many people have a better chance of paying all their monthly expenses without cutting corners. For so many, paying several monthly payments for their debts becomes an unpleasant juggling act. The account holders fall further behind on their payments, and some of their accounts may end up in collections.

A debt consolidation loan eliminates the juggling act and helps the person get better control over their finances. The product cuts the debts down to one monthly payment, and the consumer doesn't have to juggle to pay their debts off.

Taking Some Stress off Your Shoulders

Stress levels are considerably higher for people who are swimming in debt, and it takes a serious toll on their health. When reviewing ways to take the stress off their shoulders, the debt consolidation loans provide the best solution. It stops the person from stressing out and worrying about what they may lose next because they are having financial issues.

It is too easy for consumers to fall into a sea of debt as more creditors offer them unsecured credit cards, and they try to manage debts through the credit cards. Even if they started out with a low-interest card, the person could make one mistake, and they are facing high volume debts that are hard to manage.

Settling Your Debts Faster

By finding a solution to pay off debts faster, the person gets the weight of high-volume debt off their shoulders. When reviewing opportunities, most consumers find that a debt consolidation loan gives them a chance to pay off several debts at once and prevent these creditors from taking any action against them. Too often, debts are moved to collections or sold to collection agencies, this presents serious damage to the person's credit history and scores. If they can take out a debt consolidation loan to avoid collections, the person gets better control over their finances and prevents major damage to their credit.

Getting the Debt Removed Sooner

Once the original creditors are paid off, the consumer doesn't have to allow the debts to fall off their credit reports after seven years. Once the accounts are paid in full, they are no longer valid debts. It doesn't matter if the person had several months where they were late submitting their payments, the creditors cannot keep the accounts on the credit history after it is paid off. The consumer can sign into each credit bureau file a report for each of the debts they paid off. The creditors have no choice but to remove the debts. The removal improves their credit history and scores in amazing ways.

Maintaining Access to Health Services

A common issue for most consumers is medical bills that often go unpaid. If the bills are for their primary care physician, it is less likely that they will be denied health services. However, if the medical expenses are from specialists, the doctor can refuse to perform any further services until the patient settles their account. Since specialty services aren't emergent in all cases, the specialist could refuse care if the patient has a higher-than-average outstanding balance. Debt consolidation loans provide a great way to settle these debts quickly.

Reducing the Cost of Auto Insurance

By improving their credit scores, the person may see major changes in the cost of insurance. For example, auto insurance providers offer insurance coverage according to the needs of auto owners and help auto owners fulfill their mandated insurance requirements. However, the auto owner's credit scores play a role in how much they pay for their insurance premiums.

By taking out a debt consolidation loan and settling high-volume debt, the person improves their credit scores, and they could reduce the amount they pay each month for their auto insurance. If they have an auto loan, it gives them a chance to pay off the loan, and they can lower the coverage level for their automobile. A lower coverage level decreases the cost of coverage, too.

Getting Access to Better Lines of Credit Later

Once the borrower gets a debt consolidation loan, they can pay off the original creditors and get a second chance to keep their credit scores higher. Once they have better credit scores and have paid their payments for at least six months, the borrower can refinance their loan and get a lower interest rate.

After they pay paid off the debt consolidation loan, the person may get a clean slate, and they will have access to better lines of credit through a variety of creditors. If they manage their finances properly, they can get the full benefits of these new credit lines and make larger purchases later.

Avoiding Bankruptcy Claims

If a person can avoid bankruptcy, they should. The claims are beneficial for managing higher volume debts, but the court makes decisions for the claimant. In chapter 7, the court decides what assets are sold to settle the debts, and the trustee assigned to the case distributes the funds to the creditors. The claimant doesn't get to decide how their debts are paid or how much each asset is worth. They can get protection for their home, but even these exemptions are not guaranteed in chapter 7.

In chapter 13, the consumer enters into a 3 to 5 years repayment plan. The debts are not settled quickly, and the consumer must submit monthly payments according to the court's calculations of all income sources. They are also required to use all their disposable income to pay off debts that were not included in the bankruptcy claim.

If the person chooses a debt consolidation loan instead, they maintain control over how their debts are paid, and they retain all legal rights to their assets. The borrower makes all choices about how the funds from the loan are used, and they can borrow a little extra for home improvements or get a little extra money for personal use.

Consumers make decisions about their finances each day, and for some managing debt becomes a serious and stressful juggling act. Instead of facing these monthly struggles, the person could take out a debt consolidation loan and pay off several debts at one time, and they can get the original debts removed from the credit history. The debt consolidation loans eliminate higher interest rates and prevent the person from paying all the interest for each account. The products require one monthly payment, and the borrower can manage their finances with ease. A debt consolidation loan may provide the best solution for consumers facing high-volume debt and need fast help.