How Debt Consolidation Can Get You Out of Debt Faster
If you are experiencing financial difficulties due to having many high-interest debt repayments, having the right solution can save you a lot of time, money and greatly reduce stress. One such solution is debt consolidation.
By consolidating your debt, you are effectively combining multiple high-interest payments into one simple and easy to manage payment. There are several debt consolidation options, and the easiest and most popular are personal loans and home equity loans and lines of credit. Here is why they can help you get out of debt faster.
Manageable Monthly Payment
Everyone dreads servicing several debts simultaneously as it is quite stressful to efficiently manage all payments – most of which may fall due around the same period. Consolidating your debts rolls all your payments into one monthly payment that is easier to keep up with. This will greatly help you manage your debt payment alongside your budget as you only have to worry about one payment that covers all other payments.
Lower Interest Rate
Most high-interest credit cards will charge you rates higher than twenty percent. If you have several of these credit card debts, the situation can quickly get out of control. However, with the home equity loan debt consolidation plan, you will reduce the interest rate charged to your debt to around 10 percent or less. This means you will have a smaller monthly payment to worry about.
Clear Off the Principal Faster
With the high-interest debts, the largest chunk of your monthly payment goes into paying the exorbitant interest charges and so the principal reduces in very minimal amounts. This means that you will take much longer before you can clear off the principal and remember, this principle will continue to attract interest.
One of the perks of consolidating your debt is that you will get a lower interest. Therefore, the biggest chunk of your monthly payment will actually go to clearing off the principle instead of paying the interest. In the end, you will clear your debt much faster.
With the guidance and direction of BMC Mortgage & Investment Ltd, you can finally get rid of the many debt payments that have been bugging you. BMC Mortgage & Investment Ltd has the best financial debt consolidation experts in Edmonton waiting to serve you. Contact us to get started.