Debt Consolidation Information- Where and Why?

When Jason, a professor associated with the Boston Adult Technical Academy got married to Cathy who works for a Boston based non-profit organization, he was very happy. However, his happiness lasted for a short time. Jason had an avalanche of debt staring at him. Jason was expected to make monthly payments to clear the car loan and the mortgage he had utilized to purchase a house. He also had an outstanding credit card balance to the tune of $7,000. And a marriage meant that he would have to reorganize his priorities.

When Jason shared his predicament with Dan, his brother-in-law and an employee of Citibank’s Boston branch, he advised Jason to go in for a debt consolidation. As the name suggests, debt consolidation means combining all your debts to ease the repayment process. According to payoneloan.com, “A debt consolidation loan basically takes all of your bills, such as those from credit card companies, household bills etc. Then, they are all consolidated into one monthly payment which is lower than the sum of payments on individual debts.” When one goes in for a debt consolidation, he or she is essentially applying for a fresh loan. The money obtained is utilized to repay all the existing monetary liabilities.

According to Robert, an insurance agent working for one of Boston’s leading insurance companies, it is essential to get debt consolidation information. Debt consolidation information can play a pivotal role in preventing a person from taking a bad decision.

Many of you will ask, “ What is debt consolidation information and what does it include? In the opinion of Kathy who is a financial advisor to one of Boston’s leading conglomerate, when one is referring to debt consolidation information it basically alludes to finding information about the various companies that are offering debt consolidation loans, the interest rates charged by the same, as well as other terms and conditions associated with the loans.

Dilbert, a Boston based architect who had recently applied for a debt consolidation loan states that as far as debt consolidation information is concerned, you should shop around and look for lenders who are offering competitive rates on a debt consolidation loan. Dilbert states that it is necessary to choose a lender who is offering a competitive rate of interest for it can create a massive impact on the outflow of your dollars.

According to Dorothy, a Boston native, lenders usually charge closing fees or other fees whenever an account is closed prematurely. Dorothy had recently used a debt consolidation loan to repay all her debts including the mortgage she had used to purchase a house. When she intimated her decision to her mortgage lender, he charged her a heavy closing charge. Dorothy felt that all the gains made by her were wiped out by the closing cost charged by her mortgage lender.

Similarly, when you are gathering debt consolidation information, you should carefully look at the rates charged by your creditors and compare it with the interest rate charged by the lender of your debt consolidation loan so as to avoid a bad deal.  Take the case of Colin, who works as a media planner with an ad agency located in Boston. He had utilized a mortgage for the purchase of his house and the lender was charging him an interest of 7%. He also had an outstanding amount of $ 4,000 on his 4 credit cards. Colin was paying an interest in the range of 12%-17% on his credit cards. His friend, Gary, who used to cover the financial beat of the Boston Globe, advised him to apply for a debt consolidation loan. Gary located a lender in Boston who was willing him to lend a loan at the rate of 9% per annum. Gary decided to utilize the amount available from debt consolidation to pay off his entire credit card balance. He decided not to pre-pay his mortgage as he deduced that he is not going to benefit from a premature closure of his mortgage account.

Thus, whenever you are trying to collect debt consolidation information, pay a close attention to the rates that are being offered on the debt consolidation loan and compare it with the rate you are currently paying. Similarly, you also need to factor in the cost you are likely to incur when you repay the entire amount on a home mortgage or a car loan before the due date. Keeping these factors in mind will help you to bag a winning deal.

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