When the level of debt seems insurmountable and there is no way out, most people would look for ways to keep their situation from getting worse. There are three big ways debt consolidation can help you cope with debt: Budgeting techniques, debt relief, and debt consolidation. When you’re hopeless, you get to the last option: bankruptcy. But before you get there, here’s a discussion of how debt consolidation can help you get through the troubles of paying your bills, getting incessant reminders from creditors, and worrying about losing your collaterals.
Debt consolidation is one of the best options when a person is facing a life crisis such as illness, job loss, or overlooked spending.
Here’s how:
It gives you a realistic assessment of how much money you can afford to pay in a month
In debt consolidation, you consolidate your multiple debts into one debt. Instead of paying on different schedules, you only have one due date, interest rate, and lender to worry about.
Knowing how much debt you can take in, you can start analyzing how much money you can spend. You can use it as a guide to budget your income from various sources. Some people do this by listing fixed expenses such as debt consolidation payment, groceries, living expenses, and other basic needs.
The goal of budgeting in this phase is to make sure that you can make your ends meet while you pay for your debts. But, you can also use it to free yourself from a financial burden to make sure that you will not go through the same financial troubles again. Furthermore, having a realistic expectation of your capacity to spend can help you live according to your means and avoid unnecessary expenses.
It saves you from confronting your creditors
While you can contact your creditors and negotiate with them, debt consolidation works better. It is often difficult for borrowers to explain why they cannot repay their loans on time. But, when you apply for consolidation, the lender will contact your creditors and workout a modified plan to reduce your payments, forgive some interests and make the payment more manageable. In some cases, the new lenders pay them all, and you only have to worry about repaying your debt consolidation loan.
It saves your credit record
Your credit score will suffer the moment your creditors turn over your accounts to credit collectors or attach them in a suit.
It protects you from harassing debt collectors
Some debt collectors harass and use unfair practices that can ruin a person’s reputation. Although it is illegal to do so, having unrelenting calls and notices from debt collectors is not something that you can look forward to every single day.
Final thoughts
If you are seriously falling behind on your debt payments, contact ALC Commercial immediately to avoid the negative consequences of bad debts. While most lenders are willing to work out a new payment plan with you, sometimes it is difficult to prove that you’re acting in good faith and your financial situation is transitory.
ALC Commercial offers a debt consolidation loan to help you pay off all your debts while reducing the monthly dues or changing the terms of the loan.
Call us today!
