The world is growing rapidly; so are the living expenses. It is no wonder if you are immersed in multiple debts and having trouble meeting ends. From a simple dream for a car to an unexpected medical emergency can make you the guilty owner of a hard to manage debt, or debts.  If you are struggling between different interest rates and multiple payment deadlines for all your debts, there is something you can do to lessen your burden; debt consolidation.


What Is Debt Consolidation?

Debt consolidation or credit consolidation simply means combining one person’s multiple debts into one for paying off in single monthly payments. Different debts are bought together into a single, larger amount of debt, but with favorable payoff conditions, indenting to reduce your payoff period or amount. Some effective ways to consolidate your debt are taking a personal loan, enrolling in credit card debt management plan, using a home equity loan or a 401(k) loan. 

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How To Consolidate Your Debt?

The traditional and widely used method for consolidating debt is taking a loan from a bank or debt management agency to pay off several other debts. It is basically making a ‘debt’ for eliminating several ‘debts’, the one loan for all debts method. The advantage of this is that the interest rate will be lower and you’ll only have to pay off a single large debt instead of several big and small debts at a time.

You can also enroll in a debt management plan. They are offered by nonprofit credit counseling agencies or debt settlement companies. They club all your debts into one and instead of paying your different debts to different creditors; you can pay single monthly payments to the agency.

Know more about debt management.

How Consolidation Helps?

 Debt consolidation can help you out from the burden of debt easily and effectively saving your energy, time and money. Let’s take a closer look at the benefits of debt consolidation.

  • Single Payment Instead Of Multiple Payments

Debt consolidation can make paying off debts much more easy and simple. By combining different debts with different interest rates and due dates into one, it can lessen the burden off your shoulders. It is not like your debt has reduced, but channeling the streams of payment into one single large payment surely helps you focus on one debt source

  • Reduction In Interest Rates

If you have unsecured debts like credit card debts, the interest rate will be high. And having multiple debts with different high interest rates will significantly increase your monthly payment. By consolidating your debt and paying off these high interest rates all at once, you’ll be left with a single loan or plan with a lower interest rate. You can reduce your monthly interest to a fair amount and thus can save money. Well, the rate of interest depends on your credit score. Higher the credit score, lower the interest rate.

  • Improvment In Credit Scores

One of the biggest benefits of debt consolidation is that it can actually improve your credit score! Yes. It may dip your score at first, but if you consolidate your debt by taking out a personal loan, it will reduce your credit utilization rate. This can boost your credit rating to a good extend within a few months. This makes credit consolidation a better option than other debt settlement plans.

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  • Reduces Stress

Consolidating your confusing, unmanageable debts into a single debt will be a great relief for you. The stress of tracking and remembering your different due dates will be long gone along with the multiple debts. You can lead a stress free life by concentrating on a single debt and taking control of your finances. 

  • Pay Off Faster

With different debts with higher interest rates, it will take eternity to finally payoff all liabilities. By combining debts into one with a comparatively lower interest rate, you can pay off your debt sooner and faster. Due to different consideration factors and strategic payback plan, debt consolidation loans and plans have a shorter payback period. This helps you become debt free faster and attain your financial freedom.

If you are having trouble keeping up with the confusing details of all your debts, choose debt consolidation. There are great advantages to choosing debt consolidation to pay off your debts. Debt consolidation is the best way to pay the debts effectively, saving your time, money and energy. 

Wethinksolutions is a debt consolidation agency in Dubai. We offer debt management services like credit consolidation loans and debt settlement plans. From effective debt advice to helping you with our responsible one-loan-for-all-debt short term loans, we are the answer for everyone in need. 

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