Your monthly payment on the first loan is 7, and the payment on the second is 3. You consult a company that promises to lower your payment to 0 per month and your interest rate to 9% by negotiating with your creditors and rolling the two loans together into one. Who wouldn’t want to pay 0 less per month in payments?
If that’s not bad enough, you’ll end up shelling out ,080 to pay off the new loan versus ,392 for the original loans—even with the lower interest rate of 9%.
The enticingly low interest rate is usually an introductory promotion and applies for a certain period of time only. In almost every case, you’ll have lower payments because the term of your loan is prolonged. Your goal should be to get out of debt as fast as you can!
You are only restructuring your debt, not eliminating it.
You don’t need debt rearrangement, you need debt reformation.
Here are the top things you need to know before you consolidate your debt: But here’s the deal: debt consolidation promises one thing but delivers another.
In other words, they haven’t established good money habits for staying out of debt and building wealth.
Their behavior hasn’t changed, so it’s extremely likely they will go right back into debt. The debt includes a two-year loan for ,000 at 12%, and a four-year loan for ,000 at 10%.
Minimum monthly payments aren’t doing the trick to help nix your debt.
Something has to change, and you’re considering debt consolidation because of the allure of one easy payment and the promise of lower interest rates.