Let's Get Your Bills Together and Feel Alright

One bill. It just sounds so good doesn't it? Consolidating your bills can not only provide peace of mind but can help you to reduce debt, streamline payments and pay down principle. Many of the consolidation strategies are things you can start doing in minutes over the phone. Taking the time to understand debt consolidation can be the first step toward getting out from under your bills.

  • Consolidate debt
  • Consolidate bill payments
  • Reduce debt
  • Pay down principle

How Does Debt and Bill Consolidation Work?

When you consolidate you're paying off high interest debt you have in several places using low interest credit you have somewhere else. You may for example transfer credit card debt from several high interest cards to one low interest card. The goal is to lower your over all payments each month and free up money to apply toward your total outstanding balance.

Direct Consolidation for Student Loans

If you are strapped with student loans you can't pay, the federal government may be able to help you combine your federal education loans through a Federal Direct Consolidation Loan. These consolidation loans are available if you have a Direct Loan or Federal Family Education Loan (FFEL) that is in deferment, repayment, or default.

The advantages of a Direct Consolidation Loan are:

  • One monthly bill means easier debt management
  • Reduced monthly minimums allow you to pay down more principal
  • A variety of repayment options are available to meet your current income level
  • Additional deferment possibilities give you greater freedom from your debts

Credit Card Consolidation

Credit card debt consolidation involves transferring balances from several cards to one lower interest card. Most credit card companies will offer special low introductory rates on balance transfers. Shop for a new low interest card or look to see if you already have one with room on it and call to see if they have a balance transfer offer.

There are a number of advantages to consolidating your cards:

  • Fewer bills and fewer late fees
  • Lower interest rates
  • Lower monthly minimums

But remember - these low introductory rates don’t last forever.

Debt Consolidation Loans

If you have assets to put up as collateral you may qualify for a debt consolidation loan from a bank or credit union. You might also consider refinancing your mortgage or applying for a home equity loan or a home equity line of credit.

What ever option you choose be sure it's part of a long term plan for getting out of debt. Too many debt relief options only get you deeper into trouble. By making smart consolidation decisions you can start to bring down your debt and just as importantly start to feel alright again.

Sources:
http://loanconsolidation.ed.gov/index.html
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