- Debt consolidation program primarily eliminates the portion of the total debt built up by accrued interest and other financial charges. Therefore, the total debt amount continues to grow over a period of time. When an individual default’s payment on any account the interest and financial charges are stacked over the debt. For example, if someone has principal balance of $2500 and interest and other finance charges added up to $3500 for a total debt of $6000, the consolidation programs can first eliminate the $3500 to bring down your debt back to $2500.
- The consolidation company collects one single payment every month and will disburse funds to all the bills such as medical, credit cards, utility, etc. One need not remember the payment dates for the all their accounts and usually the payments are made in time so the late fees are minimized.
- Although consolidation program cannot eliminate interest, it can lower the interest rates substantially. At the same time it can also minimize the monthly payments than what it was originally. For example, if the interest rate was 19% it can be reduced to 12% thus minimizing the debt accumulation.
- Consolidation program prepares an aggressive repayment plan for the debtors willing to consolidate their debts. This helps the consumers to have extra cash on their hands, while they stay with the program without missing a payment.
- People always like to pay minimum on their credit cards, which takes up to 12-15 years to clear the debts. As a result, one ends up paying a huge sum of money to the credit card companies over a period of time. A debt consolidation program can make one debt free within 2 to 4 years and provides financial freedom by saving money.
Take control of your debts with adebt help plan from the UK experts.