Debt consolidation is not a quick fix. There are many benefits to consolidating your debts into one monthly payment, but with some work you can learn how to live on one income pay debt.
Debt consolidation allows you to get out of debt and into a new debt situation without paying more than you can afford to pay. The consolidation service consolidates all of your debts into one. You pay that one debt from the new account. There are several advantages to this type of debt relief.
First, you only have to make one payment instead of making different payments to multiple creditors. This means you can make one payment every month instead of two or three. It also means that you can only pay on one loan. That means the monthly payment is lower than if you were to pay several loans at once.
Second, when you consolidate your loans, you often save money because interest rates are usually lower. For many borrowers, the amount of their monthly debt is more important than the interest rate. With an interest rate lower than that on your consolidated loan, you will find it easier to be able to handle it each month.
Third, since the interest rate is lower, the total amount you pay on your debt is lower. This means you can handle your debts much easier and it means you can afford to pay the new debt in full each month.
So how do you learn how to live on one income to pay the debt? The first step is to find a company that offers consolidation loans. Before you commit to one consolidation company, you should compare what the three major companies charge for their services.
Of course, most companies charge a fee for everything. This is why you must compare each of the fees before you decide to use them.
Typically, the companies charge a service fee, a setup fee, a down payment, and annual percentage rate (APR). If you negotiate the APR down and work with the consolidator to lower your payments then they may offer to lower the setup fees as well. Your goal is to find a company that can offer you the debt consolidation service with the lowest fees possible.