To get to grips with soaring inflation, interest rates are soaring by leaps and bounds affecting people from all walks of life. Every day people are trying to find some way out to ease their debts and get back on track financially. With ever increasing inflation rates and never ending financial instabilities life has turned upside down.
If even you are struggling with your debts, like many of us, and looking for a way to pay off your debts then debt consolidation can help you in getting out of red. Debt consolidation is consolidating your debt by taking another loan to pay off other debts. Let’s see the bigger picture of debt consolidation by getting a bit deeper.
The ideas behind debt consolidation- Faster pay off and lower payments!
The basic idea about debt consolidation is, combining several high interest rates into a single lower interest debt. This can benefit you in several ways, two of which are: One, if you have lower interest rates then you could apply interest savings to the principle of loans and two, with lower interest rates you can lower the monthly installments. It is one way of getting rid of your debts quickly and easily. It is important because people are paying too much interest on their debts which is leaving them empty handed at the end of the month.
Investigate all your options: Three popular ways to consolidate your debt
Take advantage of credit card balance transfers. This is transferring your money from high interest credit card to low or 0% interest rate credit card. This means you aren’t charged any interest rates for a specific period of time. These can help you pay back your debts easily because during this specific period every payment you make goes to the actual balance not to the interest. Like if you owe a debt of $2000 with 13% interest rates then your monthly payment has to be $347 to pay off debt in six months. But if you transfer this $2000 to credit card with 0% interest rate you’ll have to pay $334 thus saving $77.
Apply for unsecured line of credit. By applying this you have an easy and flexible access to the funds. You can borrow funds from banks at anytime as per your requirements, by asking for a check. ULOC is similar to credit cards but is available on very low interest rates and you are allowed to pay money in a lump sum.
If you have a life assurance then you can borrow money on its value. The best part is that you don’t have to pay it back at all. But if you want to pay it back (to let the beneficiaries benefit from the insurance) you’ll be having ample of time.
Think carefully before you decide to consolidate
What you need to keep in mind before you consolidate your debts is, that think carefully about how much you’ll have to pay at the end? Is it going to cost you less or more? Be good with the numbers and calculate how the balance transfer offer is likely to change over time. Learn about secure and unsecured loans and before putting you beloved furnished apartment at stake think about the benefits you’ll receive in long run.
Pamela Walker is 28 years old writer. She has years of experience in Toronto apartments. She is very expressive and always wants to share her professional experience with her audience. She regularly writes Guest post about Toronto furnished apartment rentals.