Consolidate Debts

Consolidate Debts

You might understand the concept of consolidating debts to save money, but time? Allow us to explain...

A Different Concept of Time

When we say you should consolidate debts to save time, we mean that when you consolidate debts, you'll get out of debt a lot sooner--five years instead of 13. See, the average household carries $9,312 in credit card debts. At this rate, it would take 13 years to pay it off, assuming an interest rate of 14% and assuming you only pay the required monthly minimum (which is now 4% of your balance instead of 2% like in the past). This means you'll be paying $3,778.81 on this balance in interest, so you pay back $13,090.81. But when you consolidate debts, you will cut this amount of time down to five years, like we said. How is this possible? Through interest rate reductions!

Interest rates hold you down. They are the reason it takes so long to get out of debt on your own if you don't consolidate debts. And there are a couple of constructive ways you can do it! If you want to try it on your own first, that's perfectly understandable. In fact, if you have a lot of credit card debt, it might be the best way to do it. What you do is transfer all your credit card balances to a credit card with a 0% introductory interest rate, no annual fee and no balance transfer fees. Then try to pay it off in full during the introductory period. Most of these introductory periods are six months to a year. This would truly be the fastest and cheapest way to get rid of your credit card debts--if you can swing it.

If not, you can still consolidate debts through a professional debt management program. There are five different kinds to choose from: debt consolidation, student loan debt consolidation, debt settlement, debt consolidation loans and debt consolidation mortgages. A debt management company can tell you which one is best for your financial situation and implement the plan for you.

Whatever you decide to do, the sooner you get started, the more money you'll save.

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