Consolidating debts pros cons
He was previously an Associated Press reporter and editor in Washington, D.C., a correspondent for Westwoood One Radio Networks and Marketwatch.And since most of the debt most consumers have is on credit cards, there is a very simple way to consolidate it."Consolidating unsecured debt can be done by transferring multiple balances to a single credit card," Mc Clary told Consumer Affairs.
Bruce Mc Clary, Vice President, Communications at the National Foundation for Credit Counseling (NFCC), says a consolidation loan can sometimes save money in the long run if it has a lower interest rate and fees.
Pro #3 — If you've had past credit problems, creditors are likely to hassle you less if you're working with a debt consolidation firm.
If, for example, you do start to get calls from creditors, a reputable debt consolidator will often be willing to speak on your behalf. For example, when you go with a debt consolidation plan, you're required to stop increasing your overall debt, which often includes limiting the use of your credit cards.
Between mortgage payments, car loans, student loans and credit card debt, we need to have a clear plan for paying off debts — especially if we're responsible for a lot of different debts all at once.
Most financial experts might define debt consolidation as the replacement of multiple loans with a single loan, often with a lower monthly payment.