How Much Can You Save?
Some worry that if they go the route of the debt consolidation
that they will not actually save all that much money. They also
worry that their credit will be negatively impacted by taking on
more debt than what they already have. However, they are looking
at it from the wrong point of view. Not only will they save
themselves money over the life of the debt consolidation loan,
but they will also help their credit score increase because they
will have paid off those debts that they might be behind in.
Look at it this way – you have four credit cards and maybe you
have $2,500 on each of those cards. Well, it has gotten tough to
make those payments on all of them so maybe you have one that
you are paying on time, maybe even two – but the other two have
gotten behind. So your credit card company has increased your
rate to 30% and they are charging you a $35 late fee each month
that you are late or miss your payment. You could go on like
this forever.
But then let’s say that you move all of this to a debt
consolidation loan. Not only have you just paid off the credit
cards that are reporting you as late, but you have also
eliminated the late fees that you are being charged each month
and the interest rate has drastically dropped. Now you are
saving that $35 each month as well as the additional money that
comes from the difference between the old interest rate and the
new one – which really adds up after a while.
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