Debt Consolidation

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Debt Consolidation

• lifethenfinance.com

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What is Debt Consolidation ?

• Debt consolidation is the process of having your
  debts combined and managed by a 3rd party i.e.
  debt consolidation company with the hope of a
  lower monthly payment and interest rate
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• -Credit Card Debt is the top personal debt type
  in the United States

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Facts    

• The debt is still there
• The behaviors that lead to the debt are still
  there
• 78 of people who use debt consolidation
  accumulate debt again
• Being in debt is a symptom of a bigger problem
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Debt Consolidation

• Myth
• Saves Interest and smaller payments
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• Truth
• Unwise method to eliminate debt.
• Reduced interest, one small payment and increased
  time to payback. Instead of paying your debt in 2
  years, it will be 5 years.

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Debt Consolidation Companies What they do?

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• Negotiate a lower interest rate with your
  creditcard company.
• Consolidate all your debt into one monthly
  payment.
• Most of the plans are approximately 5 years.
• A percentage of your monthly payment goes to fees
  charged by the debt consolidation company.
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Summary

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• - Debt consolidation is a high risk approach to
  paying off credit card debt. 
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• -Have a plan and do it yourself
• - Call your card company directly and negotiate
  reduced interest payment in turn reducing your
  monthly payment.
• -By doing it yourself, you are modifying your way
  out of debt