Debt is a troubling cloud over the heads of thousands of people, but there is a ray of hope in three simple words: personal debt consolidation. Throw off the shackles of your debt and free yourself from that grumbling cloud and smile in the sunshine again.
Personal Debt Consolidation Calculators
Many financial Web sites offer an easy-to-use formula that will determine whether or not consolidating your debt will save you money in the long run. All you have to do is fill in the amount of money you owe for each credit card or loan, the Annual Percentage Rate (APR) of each card or loan, and your monthly payment for each. The formula then calculates one APR for all your loans and the new monthly payment you would have to pay, as well as how long it would take to pay off your debt and a comparison chart to show how much you would save versus not consolidating your debts.
There are a couple of things you should think about when you are filling out the calculator form. First, if you put in a lower introductory APR that only lasts a limited time, the length of time it takes to pay back will be much longer because the rate is used to calculate all future credit card payments. Also, you have the option of selecting “use credit card minimum payments” box, which calculates your minimum payment as 2 percent of your monthly balance. Since your balance will decrease every month, so will the 2 percent repayment, making it take much longer. But by paying the same amount each month, you will be able to pay off your debt faster.
Things to Know When Looking for Debt Consolidation Help
- Avoid debt consolidation companies and services that claim to be “non-profit.” This term is used extremely loosely and does not mean you do not have to pay for the company’s help, which is usually labeled “operating costs.” There are plenty of other reputable companies that are upfront about their services and fees and do not hide behind manipulative advertising.
- One good option of personal debt consolidation help is Consumer Credit Counseling Services. CCCS can work with you to determine how much you can afford to pay each month and negotiate with your creditors for a lower minimum payment, if necessary.
- The best way to fix your debt is to do it yourself. You can negotiate with creditors yourself. By simply understanding the consequences of debt and your options for getting out of it, you are already half way there. Getting terms in writing is always important and keeping good records will also help you stay on track.
- Whatever path you choose for personal debt consolidation, remember to keep your cool! Money is a powerful thing but you have to have the power to control it, not to let it control you. You can overcome this feat! With a little perseverance and smart thinking, your debt can soon be behind you.
By Monica Drusch