How to Consolidate and Reduce Your Monthly Credit Card Payment With Debt Settlement
When considering ascension financial solutions, one must consider the fact that there are two ways to achieve financial freedom.
One way is known as debt consolidation and the other is known as debt settlement. These can be done individually, but in most cases it is better to use a service to get them done together. The following will give you an overview of what these two options mean and what the benefits are of using one or the other.
- With debt consolidation, you roll all of your high interest credit cards into one low interest credit card.
- You pay a lower interest rate on this new card, which allows you to pay off your debt in about five years. In addition, you can usually get a lower interest rate for the life of the account.
- This gives you an ideal situation where you are paying less to the lender and paying off your debt much faster.
However, there are many downsides to consolidating your credit cards. First, you will generally have a lower credit score than you would if you paid off each of your accounts separately. Also, if you have a good enough credit score to secure a decent loan before consolidating, you may end up paying a fee that is a percentage of your loan amount or more. Finally, if you consolidate, you usually lose access to some of the perks that are offered with your credit cards. For example, you cannot enjoy any cash back or rewards programs until your debts are paid off.
If you find yourself in a financial bind and cannot afford to pay your bills, you may opt to talk to your creditors about a settlement. Settlement involves speaking to your creditors and seeking a reduction in your total amount due. Usually, you can reduce forty to sixty percent of your debt through settlement. Your credit score will be impacted for a time, but the positive results of your efforts will make it recover over time. As a result, most credit repair specialists recommend that people who are considering bankruptcy should think about settlement instead.
While it may seem that merging your credit cards would negatively impact your credit score, this is not necessarily true. In fact, the opposite is true. If you have too many accounts with a high balance due to poor financial management habits, you are less likely to pay them off in a reasonable amount of time. Therefore, it makes sense to consolidate all of your high-interest debt into one low-interest account. By doing so, you can potentially save hundreds of dollars per month in interest costs. This may not seem like much, but over time, it adds up.
Debt consolidation loans: If you need a quick and easy solution to a financial problem, consider a debt consolidation loan. Consolidation loans are made to pay off all of your loans, debts, and credit card balances. Most lenders require a decent credit score in order to grant you the loan, but there are some that don’t. In that case, you can use a settlement or payment plan to ensure that your creditors will accept the lower monthly payment. It is important to note, however, that once you use a settlement or plan to repay your credit card debt, you will have to start paying back this new loan in full.
If your lender does not approve your settlement or consolidation loan application, you can still use them to reduce your monthly payment. The key is to be reasonable with your loan terms. For instance, you can negotiate a lower interest rate by extending the time period over which you repay the loan, reduce your payments to a lower amount, or stop making payments altogether. Once these terms are met, your lender may agree to modify your loan.
As mentioned above, once you reach a settlement, your creditors are more likely to accept terms that are favorable to you. This is good news if your credit score has been suffered because of missed or late payments. If you are facing financial hardship and want to apply for a consolidation loan, you can talk to a debt settlement company. They can negotiate better terms for you and lower your monthly payment, resulting in less stress on your part and a more successful recovery from your debt.