The Process Of Credit Debt Consolidation

 

Debt consolidation is the process of combining all your debt into one expense account. This usually entails the taking out of one loan in order to pay off all your outstanding debts. Consolidating your debt will usually mean that you obtain lower interests rates, and usually a lower repayment rate with each creditor can be negotiated on your behalf.

Debt consolidation needs collateral such as a car or house and for this reason one must have a secure job in order for this service to be offered or carried out. Usually one loan is made against the collateral available which receives a lower interest rate. This is because the agreement between both parties ensures the forced sale of said asset in order to pay back the loan should the monthly payments not be made. The interest rate is lower as a result of reduced risk to the lender.

How does debt consolidation work? Firstly you will need to approach a debt review or debt counselling entity. A consultant will then take the time to go over your finances with you and decide upon your current financial status. All your debts will be taken into account and the amount you can realistically afford each month will be worked out.

This is of course taking into account your monthly expenses such as transport, rent, and food and so on. Once this has been decided, the debt counsellor will approach all your creditors and negotiate a better repayment rate on your behalf. Agreements will be set in place and the finances provided to pay off these amounts. You will now only owe one financial institution for your monthly expenses.

If you feel that you are in a financial pickle and need advice and possibly even debt consolidation services then Debtcor is just the place to go. Take the time to contact Debtcor and discuss your financial difficulties with them today.

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