FINANCIAL RELIEF VIA DEBT CONSOLIDATION.

Each year millions of individuals become debtors as a result of financial mechanisms usually beyond their control. While a majority of the debts occur because of simple loans obtained from lending institutions, the others are usually products of more complex situations.

Now by their true nature, debts come with binding responsibilities which all concerned parties must adhere to. This for the consumer in addition to several other conditions would mean paying the required monthly amounts alongside the stipulated interest as and when due. While to the lending institution, this will have to be in the area of properly investigating all parameters submitted by the consumer and vetting to indicate consumer suitability for the facility.

In a bid to keep-up with personal/family societal expansion trends, more individuals end up obtaining different loans for varying purposes. This multi-loan situation usually comes with a wide variety of interest rates based on independent factors and which show no consideration whatsoever to one another. This situation as tempting as it may seem as a “win-win option” to the consumer may as a matter of fact place the individual at an uncomfortable position where the repayment plans in addition to the attendant interest regimes create a more complex environment. Having gotten to this point, the only viable alternative to the individual is an effective process referred to as “debt consolidation”.

Debt consolidation simply refers to a process of obtaining a fresh facility in other to pay off existing loan portfolio. This process allows the individual to “batch-up” earlier existing loan facilities into a single package thereby having an open window to secure a lower interest rate which is secured and highly convenient to service. The individual is often encouraged to consolidate unsecured debts accrued from credit card usage due to the high interest rate such debts attract. The process usually involves providing collateral (foreclosure enabled) for the secured loan which in turn brings about a lowered interest rate; enabling the individual to settle debts sooner and at a much more reduced cost.

The individual by adopting debt consolidation enjoys the following benefits:

1.       Reduced monthly debt servicing charges

2.       Possess an exact date for full debt cancellation.                  

3.       Multiple debt repayments are replaced with a single monthly payment.

4.       Shielded from ever rising interest rates from different lending institutions.

5.       Provision of a larger portion of the monthly income to attend to other pressing needs.

Individuals are however advised to seek professional advice as regards debt consolidation so as to get the best result thereof.