Debt Consolidation: Could It Help You?

February 21, 2013 at 2:22 PM Leave a comment

I must start this post by stating that I myself have never been in debt. My parents paid for my college tuition and I’ve always paid off my credit card bills in full each month. When I graduated from college I lived in a 9×9 room, (really more of a sun porch then a real room in the house), because rent was tremendously cheap. With the help of that tiny rent check, ($310 in 1999), I bought a new car and paid off the loan in less than a year.

I’ve made good choices in my life, but I’ve also been very blessed. I found a job right out of college with solid benefits that enabled me to stay home and heal for five months after an unexpected surgery. Had I worked somewhere else my medical bills and time off may have resulted in a very different financial picture.

Others are not always been so lucky. When medical bills loom they are forced to use credit cards to pay their doctor and hospital bills. There are a number of ways to help pay off these debts. You can ask credit card issuers to lower your interest rates, you can try to borrow money from friends and family, you can take out a home equity if you own at least 20% of your house or you can turn to debt consolidation services.

Debt consolidation works to lower the interest rate on your existing debt. Rather than paying multiple bills at a high rate each month you pay just one bill. 

There are pros and cons to debt consolidation. It’s a bad idea to use a debt consolidation plan if you know that you cannot control your spending. This wouldn’t be the case for someone who has gone into debt for medical bills, but it could be a problem for someone who is prone to overspending. Also, debt consolidation services often extend the term of your debt, which means you pay less money per month, but may end up paying more over the long term. Still debt consolidation can be a good idea for someone looking to alleviate their current debt burden. It will provide more breathing room to pay for necessary daily expenses.

If you are looking for alternatives for dealing with your debt check out debt consolidation advice online. There is a plethora of information available.

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