Why debt consolidation is the best option for over indebted consumers
Debt consolidation enables you to only pay what you can afford. Instead of having to pay a number of different credit providers each payment period, a debt consolidation company like Zero Debt can assist you by combining all your existing outstanding loans and liabilities into a single more affordable monthly repayment at a lower interest rate. Such a solution will leave you feeling empowered because you will still have sufficient funds for your day to day living expenses and you won’t be forced to sacrifice the quality of your life.
Debt consolidation is a great way to save money and it’s important because people are often paying way too much interest on their debt. It’s also very beneficial to those who can’t seem to manage to pay their bills on time. It’s easy to become overwhelmed by the multiple statements and payment dates when you’re over indebted. A consolidation loan takes all the outstanding debts and payments and transfers them all into one loan with only one payment date to keep in mind and one statement to read. If you’re ready to tackle your debt in a smart and healthy way, here are 4 steps you can follow:
- Identify your debt amount
It’s time to face those unopened statements and bills and distinguish between good and bad debt. A mortgage debt is usually considered as good debt as homes usually appreciate in value and the mortgage loan that you usually take out to pay for the home is an investment. When you use debt to finance things that can be consumed, you aren’t accumulating good debt.
An example of bad debt can be using your credit card debt to purchase everyday items like clothes and food or pay for a holiday. Calculate the total debt that you owe to family and creditors, work out which debt has the highest interest rate and find out how much you’re paying in interest on those debts. Clear up what you’re spending your money on and determine how much you need to pay it all off.
- Create a new budget
Determine how much you’ll actually need for day to day living, leisure, savings and to service your debt repayments. You will probably have to cut on some luxury items until you get your debt in order.
- Get your loan consolidated
Contact us and request a free debt assessment. We will endeavour to work with you and draw up a schedule of proposed repayments with your various creditors. This schedule will reflect a realistic amount that you can actually afford each month and ensure that you only land up paying the minimum amount which is required by your credit providers thereby reducing your monthly debt obligations.
- Stick to the plan
Debt consolidation only works to free you from debt if you stop overspending once you pay off your big debt amount.
You don’t need to hit rock bottom before you can start to rebound from your debt. Consolidating your debt is a great tool for opening doors to financial freedom.