You’re in deep with credit cards, student loan debt and car loans.Minimum monthly payments aren’t doing the trick to help nix your debt.Two words for you: , although often the terms are used interchangeably.We’ve already covered consolidation: It’s a type of loan that rolls several unsecured debts into one single bill. Debt settlement means you hire a company to negotiate a lump-sum payment with your creditors for less than what you owe.You are only restructuring your debt, not eliminating it.You don’t need debt rearrangement, you need debt reformation.
In other words, they haven’t established good money habits for staying out of debt and building wealth.
If that’s not bad enough, you’ll end up shelling out ,080 to pay off the new loan versus ,392 for the original loans—even with the lower interest rate of 9%.
This means your "lower payment" has cost ,688 more.
But let’s be honest: Your interest rate isn’t the main problem. This specifically applies to consolidating debt through credit card balance transfers.
The enticingly low interest rate is usually an introductory promotion and applies for a certain period of time only. In almost every case, you’ll have lower payments because the term of your loan is prolonged. Your goal should be to get out of debt as fast as you can!