Do you have substantial debt? Are you tired of paying multiple bills each month? If so, debt consolidation may be right for you.

Often, if you apply for and are approved for a personal loan, the interest rate will be lower than the interest rate you are paying for the other debt you may have, such as credit card debt. For example, if you have two credit cards with a total balance of $2,000 and the rate of interest for the credit cards is close to 20%, you may be able to locate a personal loan which offers a 10% interest rate on a $2,000 loan. By doing this, the principal will be the same for the credit cards as for the personal loan, however, the lower interest rate for the personal loan will mean that your monthly payments will be lower.

There are many forms of credit which you can look into. Two forms of credit might be a high credit limit credit card or a personal loan.

One type of loan you might consider is a secured loan. Typically, lenders feel comfortable with secured loans because an asset is used as collateral against the loan. There are many types of collateral, however, the usual forms of collateral are vehicles and homes. These loans are popular with lenders because they feel secure the loan will be paid because the borrower will not want to lose the asset upon default.

Are you tired of having your debt spread out amongst several companies and lenders? Wouldn’t it be easier to pay one monthly bill than two or more each month. Consolidating your debt for convenience sake is another reason for considering debt consolidation. Consolidation allows for easier budgeting as the payment will be due on or around the same time each month and will most likely be for approximately the same amount each month.

Another reason people consider debt consolidation is to save money. As outlined above, you can normally find either a personal loan or high credit limit credit card with a lower interest rate than your debt which, in turn, will allow you to pay less each month, thereby increasing your monthly disposable income.

These are all good reasons, however, there might be a down side. You need to pay careful attention to the credit product you choose to make sure you will not be paying more in the long run. For example, if you were to use a secured personal loan to consolidate your credit card debt, you could end up paying more over the term of the loan, depending upon the length of the loan and the interest rate.

If done thoughtfully and carefully, debt consolidation can be a good way to go. Search for the lowest interest rate you can find and one which is lower than the debt you are trying to consolidate. Consider all angles and get the best deal.

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While it may feel like you’re saving funds by sending the required amount due on your credit card, the truth is, you’re really paying much more. This season of the year more than ever, the temptation to only pay the required amount and convincing yourself you’ll have more funds to spend on presents and yuletide greetings is a problem for many. No matter the amount of debt you currently have, this info will show you the importance of paying more than the required – something that could save thousands of dollars over time. How’s that for a stocking stuffer?

Over time I have been asked many times if it is cheaper to have a debt consolidation loan or many credit cards, some with no interest. The first thing you need to evaluate is how fast you want to pay the debt off. The best piece of knowledge is that you pay it off as quickly as possible. Let’s have a look at the effects of making the minimum monthly payment on a credit card.

As more and more credit card companies are being open and allowing even lower required payments you may say this is a good thing. And you may be right if you are really down, but watch out, it is costing you a lot in the long run, which of course is why they do it. Yes, I know it is a shock, you assumed they were just being friendly! Unlike a debt consolidation loan that has fixed monthly charges (Assuming rates don’t update), you can vary the monthly charge on a credit card. For example, if you have a credit card debt of 3,000 with an interest rate of’ percent (Annual Percentage Rate) and the required payment allowed is 3%. In this case the required monthly payment is 90. By making this charge and not using the card for anything else, it will take 12 years and 5 months to pay off this debt, and you will have paid a total of 2,714.16 in interest!

So, the next month you get a letter with your statement saying that you are such a great customer they are going to lower the minimum charge to 2%. Great, you think, I’ve only got to pay 60 month and I can spend another 30 down the pub. But lets look at what you are really paying. By making the new required payment only, it will now take you 28 years and 5 months to pay off your debt and you will be spending a whopping total of 7,845.73 in interest. This is an additional 16 years and 5,131.57 in extra interest, rather an expensive trip to the pub I would say. So, maybe the credit card company isn’t being so kind after all, maybe a debt consolidation loan with it’s higher monthly charges isn’t such a bad suggestion.

Yeah, I can hear you wondering, but what about the credit card with zero interest, well, that is different article, but basically a lot people forget to update at the end of the period and end up with high interest.

Given these facts I would advise you to pay more than the minimum charge and pay of the credit card debt as soon as possible. If you’re not able to pay even the minimum, a debt consolidation loan with a lower interest rate and a shorter term or debt settlement may be choices to evaluate.

Will holiday spending have your credit tapped out, debt relief from Debt1Options is a great way to lower credit card debt today.

categories: credit card debt,debt settlement,unsecured debt,personal finance,debt,credit,bankruptcy