The Pros And Cons Of Debt Consolidation In 2013



Most people today tend to have several loan accounts in which they are paying off through an agreed monthly amount. Numerous loan accounts would include mortgages, cars, education, personal unsecured cash and higher end items through store finance schemes. These can equate to quite a considerable amount through several separate accounts with different lending institutions. This would tally through the agreed monthly repayment plus the interest charged. With the New Year in full swing, let’s have a look at some of the pros and cons for debt consolidation.

PRO - One Affordable Monthly Payment

Consolidating your loans will establish one monthly payment. Opposed to paying several monthly repayments on individual accounts, a consolidated loan will incorporate one final, more affordable monthly payment. This becomes far more manageable for your household as you only need to worry about the one account, rather than chasing up and finalising numerous debts.

PRO – Save More Money with Less Interest

With a consolidated loan, you’ll only be paying interest on the one account. The interest charged will be a higher amount than all the separate individual amounts on the other accounts, however it will be much lower than the overall total of all those individual loans. Therefore you will be better off financially as you’ll be paying less, or similar interest monthly.

PRO – Free Consultations

Fox Symes debt consolidation offers free, no-obligation over the phone advice to help determine whether debt consolidation is the best option for you. You’ll be able to discuss your financial situation, loans with each lending institution and general repayment options that will benefit you short-term and the overall result long-term. You’ll also be provided other options if debt consolidation isn’t suitable for your unique situation.
Regardless, it is free information that will steer you in the right direction.

CON – Longer to Pay off the Final Amount

If you decide to consolidate your debts, the initial result is very attractive. You will be paying a smaller monthly repayment, saving money from only paying interest on one account opposed to several and only managing one loan account. Although the consolidated loan is designed for all these purposes, the long-term result will be that you are actually paying for an extended period of time. For example, if you had 5 individual debts for mortgage, cars and personal items, these may have been for set periods of time, some shorter than others. Obviously the mortgage is long-term but a loan through a retail store for a TV may only be 2 years.

The consolidated loan will total all these accounts and integrate into one overall, smaller payment. Therefore you are indeed paying off for a longer period of time, opposed to if you kept your individual accounts.

These are the significant pros and cons for debt consolidation heading into 2013. Be sure to seek professional advice before making any drastic decisions.

Michael, from Brisbane, Australia, writes for many leading news sites and blogs. For people who are having major problems repaying their debts, he recommends looking into Fox Symes debt consolidation as a possible answer to their predicament.

0 comments:

Post a Comment