When you are considering one particular option – in this case, debt consolidation – you need to be well aware about the pros and cons it offers before you sign up for it. According to Nevada debt relief agencies, debt consolidation is one of the best options available, yet there are a number of downsides to it as well, which you need to know about.
Debt consolidation is an option where all your debts are pooled into one single sum, and according to your present financial situation, an adequate monthly installment is agree upon that should get you out of debt in 2-5 years depending upon the size of outstanding amount.
The Advantages of Debt Consolidation
Debt consolidation offers many advantages:
- No More Creditor Calls – The Creditors will stop bothering you the day you sign up with a agency for debt relief in Nevada. For many, this one change is enough to make them sign up for debt consolidation. The calls stops because they would now be in touch with the debt relief agent that represents you and all the negotiations, inquires, requests, communications would be discussed with him.
- The Debt Would Be Paid Much Faster – without the debt consolidation option, you would have to pay haphazardly this and that bill, which would significantly delay the date when you would become totally debt-free. Debt consolidation – by sheer organization – would have you out of debt in the fastest possible time.
- You Make ONE Single Payment Every Month – from the time you were making multiple payments, each one with its own deadline and amount, you come to making just ONE single payment to the debt relief in Nevada agency. The agency in turn, would make payment to all your creditors as per the re-negotiated terms and conditions. This would not only free you from stress of keeping track of multiple payments, but also ensure that you do not miss any.
- Build Back Your Credit Rating – your credit rating would by now taking a nose dive. With patience and consistent payment, you would be able to build back your credit rating, which will in turn lower the interest rates charged for any loan you apply.
Disadvantages of Debt Consolidation
- Lowers Credit Rating – Debt consolidation will be recorded on your credit report and will stay there for a while for all to see. This might affect the rate of interest creditor will charge you for any type of loan you apply.
- You Pay More Interest – debt consolidation involves pooling all your debts into one and then paying it with one monthly installment. This arrangement would involve a longer period of repayment than some of the individual loans. Additionally, you would pay more interest over, if you calculate the total amount for the period of repayment.
Weighing the pros and cons, you cannot help but agree that the advantages of debt consolidation far outweigh the disadvantages and hence, it is a good choice. Check out with your Nevada debt relief agency for all details and customization to your financial situation.