Debt consolidation is a common debt reduction measure used today to manage the debt issues many are facing. Debt consolidation offers the flexibility of making one monthly payment, paid to different creditors. In a certain way, the ease of consolidating the debts into one relieves you of the hassles of making multiple payments. Simultaneously, debt consolidation companies often are able to arrange for lower interest rates on that monthly payment you have to fork out. So these two advantages make it an attractive option for many.
But did you know that generally, most people resort to debt consolidation only with their unsecured debt? An unsecured debt is a debt that is given to the indebted without having to pledge any collateral. A good example would be a credit card bill, or to put it more aptly, credit card bills since many people carry more than one card. You would have figured out by now that there are other kinds of unsecured debts we may have that can be consolidated. To quote a few, they are:
Credit Card Debt: Debt resulting from defaulting on payments for credit card bills
Study Loans: Unpaid loan for pursuit of tertiary education
Services Subscription Bills: Bills that can be associated with services, such as handphone bills, internet service providers, monthly magazine subscriptions
Tax Debt: Unpaid taxes or related balances owed to the government for income taxes, etc
Personal Loans: Loans taken out from a financial institution or individual.
Utility Bills: Unpaid balances owed to utility companies
Department store / groceries Bills: Unpaid balances using departmental store cards
Medical Bills: Balances owed for medical services
Legal Bills: Balances owed for the performance of legal services
You may want to sit down one evening, look through your bills and see how much they pile up. Ask yourself a couple of questions:
Are you finding it a hassle to make payments every single month?
Are the interest rates on some unsecured debt exorbitant?
Do you wish you could make one payment every single month at a lower interest rate?
If your answers to the questions are yes, then debt consolidation may be a sensible choice for you to take care of your unsecured debts.