What is Bill Consolidation?
It's commonly know that bill consolidation is a great way to get you out of debt, but what is it and how does it work?
Put simply, all of your bills and debts are lumped into one single monthly payment. There are a couple ways of doing this. Bill consolidation can be done by a third party company that will negotiate with creditors for you or (if you still have decent credit) you can take out a loan that will pay all of your debt, then repay the loan. Both methods have good results, but your specific situation will determine which route to take.
The first and most important step is deciding which route to take and beginning. Bill consolidation is an easy way to get out of debt, but you still have to do it! The sooner you get started, the sooner you are done with it and the less you will end up having to pay. As soon as you finish reading this article, find a bill consolidation company or hit your bank up for a loan and get started!
Let's take a look at what bill consolidation is. The main focus of this article will be what consolidation companies do, but these principles can be applied if you take the DIY route and get a loan.
What's On Your Credit Report?
The first step towards bill consolidation is determining all of the debt that you have. A consolidation company will obtain a credit report to see all of the banks and creditors that you owe money to. It is extremely important to be up-front and honest with the consolidation companies. The more they know about your financial history, the more they will be able to assist you.
With this list they will contact all of them to try and negotiate your debt lower. They are usually very successful with this. The banks and collection companies want to close your case, so they are willing to lower the amount in order to be sure that it will be repaid. Many of the late fees and penalties will be waived, and, depending on the skill of the negotiator, some of the interest. The amount that you owe can be reduced by as much as 50%
How Much Will You Have To Pay?
After the negotiation phase is complete you will figure out how much you will be able to pay each month. Bill consolidation will help reduce the amount that you owe, but it is still a significant amount. Your current financial situation will determine how much you pay and for how long.
Most consolidation companies will help you set up a realistic budget that will allow you to continue with your life and be able to afford the monthly bill. It will usually take 5-7 years to complete your payments, but it can be shorter or longer depending on how much you owe.
What Else Do You Need To Know?
Bill consolidation is a pretty simple process, but you must be aware that if you don't complete the terms you will be in a much worse situation than when you began. If you fail to complete the terms you will be stuck with debt and not be able to find another consolidation company that can help you out. Only take this route if you are serious about getting out of debt.
What are you waiting for? Get started!
No comments yet.
More Finance Hubs by The Empire
- Accounts Receivable Factoring When Your Business Nee...
Accounts receivable factoring is a great way for your business to get quick cash. Cash that can be used in an emergency, equipment replacement, or for quick growth. If your business sees a need to grow very...
- How To Settle IRS Debt
Owing money to The Man is extremely stressful. Learning how to settle IRS debt is the first step to relieving that stress. It may or may not be your fault, but you're still stuck with the debt. If you are...
- Debt Consolidation Assistance - Who Should You Turn To?
If you're in a financial crisis you're probably seeking debt consolidation assistance. There are many avenues to take, so how do you know if you are choosing the right one? Seeking the help of a...
- Debt And Bill Consolidation
When the pressures of debt have become to large, it's time to turn to debt and bill consolidation. Almost every American carries some amount of debt (and don't forget the national debt) at some time during...
- Credit Card Bill Consolidation
When paying with plastic gets you in trouble, turning to credit card bill consolidation will lower your bills and help get you out of debt. Debt troubles almost all Americans, and many of them have, or will,...
More by this Author
Finding the best acne body wash is easy and will help you clear your skin. Body acne, bacne, or whatever you want to call it is embarrassing. Find the best body wash for you right here!
Title loans are risky business, and are normally a bad choice. However, people still use them, so it's important to discuss how they should be used, and what to watch out for when applying for them. In case you don't...
Learning how to get rid of slugs and get rid of earwigs at the same time is easy. Earwigs and slugs are two of the most common garden pests. They can go unnoticeable in small amounts, but when there are a lot...