How to Lower Interest Rates and Consolidate Debt

Paying for one credit card is very tough these days. All the financial
condition get disturbed when our income does not support our
expenditures and debt installments. But there are many people who are
the customer of more than one credit card Company. According to a
research, 6 out of 10 people have more than one credit card. This
means they are paying different interest rates like 15%, 16.25%, 18%
etc. Thus we can say that the average interest rate which you are
paying is much more if you have one loan. In this case Debt
Consolidation would be the best option to avail.
In debt consolidation, all the unsecured loans are combined as one.
Then a person is granted another loan which is actually a secured loan
and is backed by some property. With that amount of loan, a debtor
pays back all his unsecured loans which are combined as one. There are
two things in this definition, one is debt combination and the other
is secured loan. According to the first part, all the loans like auto
loan, education loan and house loan are excluded from this option.
Only the unsecured loans will be combined as one. Then we will talk
about a new loan granted to the customer to pay back all his unsecured
debts. But this new loan is given by mortgaging some property like
house or land.
There is an advantage as well as a disadvantage associated with this
option. But first we will talk about the advantage. Actually when you
have credit cards of more than one company then you have to pay the
annual interest that is very high. In debt consolidation, a single
loan will be granted and its interest rate will be low as compared to
what you were paying before. In this way, you will get relief from
paying more interest rates. But the negative side of this option is
that your property is being kept against this loan which could be
taken if you will not pay back the loan.
The monthly payment plans with debt consolidation is quiet simple and
affordable for the debt holders. By debt consolidation, you can pay
your debts in a shorter time period and your financial position will
get stable.
If you have over $10,000 in unsecured debt it may be a wise financial
decision to consider a debt settlement. Due to the recession and
overwhelming amount of people in debt, creditors are having no choice
but to agree to debt settlement deals.