Thursday, December 28, 2006
Plan For Your Debt
If you are paying extremely high interest rates on you credit cards, you should consider the option of consolidating your balances into one loan and one single payment. This could be the solution to your debt problem, providing you with a more manageable single payment with a lower interest rate and favorable terms.
The following are some factors to consider for when choosing a debt consolidation plan for your existing debt:
.You should try to lower the interest rate for the consolidation loan in order to most efficiently settle debt and maximize the benefits of the consolidation. Since the loan will be a long-term loan, a reduced interest rate will result in a significant amount of savings.
.There is a strong relationship between the length of the payments to be made on the consolidation loan and the ultimate amount you will pay on that loan. Do not move too quickly on accepting a low installment alone. With that, you must consider whether the term of the loan results in the consolidation costing too much in the end.
. Any loan taken will be a secured loan against your home which opens the possibility of repossession of your home This is why it is very important to commit to a loan that is manageable within your budget not only in the short-term but also the long-term. If it is not, avoid committing no matter how favorable the loan terms or payments may be.